credit card debt judgements
[mage lang="" source="flickr"]credit card debt judgements[/mage]
Why file bankruptcy when you can wait for the statute of limitations to expire on credit card debt?
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
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.
