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Comment by yequalsx | Hacker News Reader

A loan is a two party relationship and both parties have responsibilities. Also there are known consequences to default. Defaulting on a loan has nothin to do with morality as far as I'm concerned. If you are fine with the consequences of default then do so. It's not immoral as everyone knows the risk/consequences.

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Sure -- but typically the result of defaulting on a loan is not debtor's prison unless you happen to still be living in 1820.

Yes. I was commenting to what the parent commenter wrote. He/she seems to think strategic defaults are immoral.

So if your friend tells you he's hard up for rent and you loan him 1000 dollars he can decide not to pay you back and it "has nothin to do with morality"? After all, you were aware of the risk that he wouldn't pay you back.

One should never lend money to friends. Make it a gift. Never have an expectation of getting it back. One lending money the person should understand this but not everyone does. In the situation a friends it would be immoral to not try to pay it back. In the situation of the lender being an expert who understand the pricing of loans and understands the risks then it isn't a moral issue.

What if am an expert who understands the pricing of loans and understands the risks, but I make a personal loan to a friend? Is it immoral to not try and pay it back then?

Isn't repaying your debts (or attempting to) morality 101 stuff? You made an agreement and received a benefit from your counterparty.

Just because someone thought you might default doesn't relieve you of your obligations. I lock my doors because I think someone might break in, that doesn't mean I've "priced in" my TV being stolen so it's OK to take it.

The comparison to a locked house is not apt. It would be apt if I made an agreement with the thief that specified what happens if I willingly decide to leave the door unlocked.

When there is a contract it becomes civil legal matter and morality does not come into play.

It's a two party situation if both parties are aware of it. I didn't read any implication in the article that the bank knew about this, it was a mistake either human or software that led to him having the credit line.

so only one party was aware of it, the customer, therefore their responsibility for the borrowing.

Yes. I was only commenting not the parent commentators apparent belief that strategic defaults are immoral.

I don't think whether or not everyone knows the consequences is relevant. You can work out the purely legal or administrative downsides (to you) of lots of things.

It's relevant in the case of defaulting on a loan. Both parties in theory know the risks/consequences and, in usual circumstances, willingingly agreed to the legal framework of the loan.

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