What's the point of filing for bankrupcy? I know it clears your debts but why do people do it?

Some people want to get lenders off of their back. Also, if the debt isn't discharged, the lender can go after you in court to garnish your wages. If the debt is discharged in bankruptcy, the lender can't garnish your wages.What's the point of filing for bankrupcy? I know it clears your debts but why do people do it?
Vic J is right.


In most cases people file bankruptcy because they are irresponsible with their money and it's an ';easy'; way out. It's gets them out of debt but it costs all of us more because the companies they ';stole'; from have to earn the money back somewhere so they higher prices, etc.





However, less common is when something happens and they can no longer pay the, such as the medical bills the other guy mentioned or bad business deals.





For example: I also had a friend who started a company with someone. That other person embezzled money from the company (he went to jail for 7 years). But the company had to close as a result and stuck my friend with all the bills. He couldn't pay them so was forced to file bankrupcy.What's the point of filing for bankrupcy? I know it clears your debts but why do people do it?
People go out and borrow, borrow, borrow money. They have no way to pay all of it back. So, they file bankruptcy to escape responsibility. They don't live on what they earn. They are lazy and irresponsible.





Another scenario is someone gets sick, or a car wreck, and the hospital bills pile up so high, they can't possibly pay them. Those people are genuinely bankrupt.
Check out CPA Guy above. Another reason is many employers will check you out before hiring. Bad debts = people most likely to steal from the company = you don't get the job. Nothing official on that. Just the way it is.