The designated way out is the power of compound inflation. There will be failures but not all the debt will be swept away.
The value of the debt will decline as the result of compounded inflation
Problem is the creditors won’t like being paid back in devalued currency. Someone who loans enough money for a house expects enough back to buy two houses - not two bicycles. They’re not going to just sit there and accept that fate.
There’s just too many claims on too little wealth. Downgrading the representation of that wealth doesn’t solve the problem, it’s just another way of kicking the can around.