Why file bankruptcy when you can wait for the statute of limitations to expire on credit card debt?

Question

I was thinking about this the other day, I used to work in collections and couldnt figure it out. It takes what 7-10 years for bankruptcy to age of your credit, the normal statute of limitations is (in my state) 6 years for credit card debt and 10 years for car notes and such. Why would someone file bankruptcy when it costs so much when they can wait it out? Also if the debtor gets a judgement against them does the creditor always put a body attachment out like they do in small claims personal suits?

Thanks

Answer 1

Depending on the persons amount of debt and if they have used items for collateral waiting for the statute of limitations can be a very long time, another major reason for filing for bankruptcy is Medical Debt which has much longer and different statute of limitations some can be written off and some can never be... very weird depending on state and circumstance.

Take for instances some gets fired at the same time they need major surgery state won't cover them for that month because they made to much but they are looking at a 85,000 hospital debt along with 3 months of recovery being unemployed.

Each situation is different however there are some very good reasons why some would take a bankruptcy to absolve them selves of past debt.

Answer 2

This is a real "broad" answer.....but generally you would file for bankruptcy to protect your home/car from being taken.  

True, the SOL expires after 6 years and the debt goes away.....but if they manage to get a judgment against you that will never go away.  

So "generally" the only people who should consider BK is someone with threats of lawsuits/garnishments, or someone who can't continue to pay on their mortgage.  

And Blessed Rain is completely right...there are may "life disasters" that can hit anyone at any time.  Divorce, loss of job, medical emergencies, or some other type of disaster that you just can't be prepared for.  Things come crashing down, creditors don't care to hear the excuses, and the debtor has no other avenue of escape.  

The bad part is once you file for bankruptcy, people tend to look down on you and treat you like dirt.  Then one day they lose their job......and you get a call asking how to file bankruptcy.  

People are funny.

Answer 3

Most people file bankruptcy because the collection agencies are insane these days and call them 100 times a day and drive them crazy. Also, once they have a judgment against them, f the creditor is granted a Writ of Garnishment, their wages start being garnished. I see it almost every day.