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Bankruptcy for Credit Card Debt if No Assets

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  • 11-22-2009, 03:32 PM
    Lawler
    Bankruptcy for Credit Card Debt if No Assets
    Should someone file for bankruptcy if they have no assets (no home, old car, no savings) and their debt is all credit card debt, which is now largely non-dischargeable in bankruptcy. Also, debtor is unemployed.

    This is in a state with a 4-year statute of limitations on consumer debt and it has been several years without the credit cards filing suit. Pretty sure the debt has been turned over to collection agencies several times over by now. In fact, the 4 years is about to run out.

    What are the chances that the collection agencies/credit cards will file lawsuits right before the SOL expires if the debtor is still unemployed at that time and has no assets to seize. Will they even waste their money on attorney fees to file suit? What does the debtor have to gain by filing bankruptcy?
  • 11-22-2009, 07:45 PM
    Meatstick
    Re: Bankruptcy for Credit Card Debt if No Assets
    Quote:

    Quoting Lawler
    View Post
    Should someone file for bankruptcy if they have no assets (no home, old car, no savings) and their debt is all credit card debt, which is now largely non-dischargeable in bankruptcy. Also, debtor is unemployed.

    Credit card debt is still very easily dicharged in a BK filing. In the situation you describe above they could wipe it all out with a possible Ch.7 filing. Keep in mind though unless they file Pro Se' it will cost $$$$ for an attorney. At a minimum Filing Fees would be paid

    This is in a state with a 4-year statute of limitations on consumer debt and it has been several years without the credit cards filing suit. Pretty sure the debt has been turned over to collection agencies several times over by now. In fact, the 4 years is about to run out.

    Even if the debts go past the SOL they can and will still try to collect.

    What are the chances that the collection agencies/credit cards will file lawsuits right before the SOL expires if the debtor is still unemployed at that time and has no assets to seize. Will they even waste their money on attorney fees to file suit? What does the debtor have to gain by filing bankruptcy?

    The debt as you stated has likely been sold many times over. Somewhere down the line somebody will likely sue regardless of current ability to pay. They can and will file suit regardless of the SOL and its expiration. For these law firms filing suit costs them next to nothing. Of coarse they inflate their costs. The debtor can stop any and all collection permanently with a BK filing and successful discharge. Myself I would rather file a BK petition than always worrying and hiding from bill collectors. Much better to have peace of mind than that stress I can assure you.
  • 11-22-2009, 08:24 PM
    Mr. Knowitall
    Re: Bankruptcy for Credit Card Debt if No Assets
    I agree that your credit card debt should be dischargeable.

    Contrary to the above, a lot of debts expire without anybody suing and collection firms are loathe to sue on an expired debt - you raise the statute of limitations and they lose. Much more common, junk debt buyers will try to collect expired debts, or try to entice you into making a small payment so as to renew the statute of limitations on a debt that up to that time had been expired.

    If you wait until some of the debts expire, you may not need to file bankruptcy. If they all expire, hey - great. If some creditors sue you, you can declare bankruptcy then or later seek discharge of their judgments.

    You should consider consulting a bankruptcy lawyer - the initial consultation should be free. If you're presently unemployed but anticipating that you may get a job, it may make sense to file a Chapter 7 now as opposed to potentially being limited to Chapter 13 if your job pays enough that you no longer qualify for Chapter 7 under the associated means test.
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