I know that this question has a lot of inherent complications, such as state laws and profitability for debtors, but I ask this because there are laws in place to protect people who owe money and I'm curious about how far someone could take these protections to their advantage.
For example, if you have tons of student debt, can an agency [lawfully] take a car from you that you have already payed for in full? I have a friend who owes over $40k in debt because of college loans, and he still drives around a beat up honda that he probably will have to scrap sometime in the near future. Nobody has insinuated that they are going to take it from him, and he also doesn't appear to be in danger of having his wages garnished.
Being in debt is a scary concept to me, but banks don't go around breaking people's knee caps. How are legal agencies allowed to punish people who go into debt?