Who profits from debt? It seems like an odd question doesn’t it? If you owe money, and can’t pay, how would that benefit anyone? Well, you might be surprised to learn that one man’s debt is another man’s payday.

Case in point, and reason number ONE that debt collectors would not want you to file for bankruptcy: Credit card companies are continuing to show profits, well into, and right out of this recession. Why? They charge you to spend their money. These charges show up as interest on accounts, annual fees for card carriers, and the infamous late fees. Therefore, your filing would put a damper on the profitability of the entire credit card industry.

If you are having trouble paying off your credit cards, or only cutting checks for the minimum amount due, you might be eligible for bankruptcy. If you file, the process often rids you of those continuous charges, prevents collectors from coming after you, and cuts that profit stream for the credit card companies who are counting on your debt to fill their pockets.

Reason number two: Your credit score. If you have bad credit, which often comes from not being able to pay your bills on time, you will likely be charged a higher interest rate than those who can pay on time and in full. Therefore, those who sell items that often require monthly payments are eager for those with “bad credit” or “no credit” to walk through their doors, so they can charge more interest upfront than what you would actually be making with the purchase of your car, house, refrigerator, etc.

If you qualify, and file for bankruptcy, the process gives you a clean slate. You will be freed of all current debts, and therefore your credit score will recover. In turn, this will afford you lower interest rates and again, decrease the profit margin for those debt collectors.

Number three: They would no longer be able to order your employer to take money out of your paycheck. Wage garnishment is typically court ordered, and the orders are given to a third party, i.e. your employer. They then have no choice but to calculate what you owe and begin deducting your pay, to fulfill your debts to the collectors.

If you file for bankruptcy, the “automatic stay” that is immediately put into place, will stop ALL creditors, including those who have resorted to wage garnishments. They will no longer be allowed take money directly from your paychecks, which means you can get back to being paid, and they won’t.

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