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I agree but that is not the case for most of this. People spend to much and run up to much debt because they are trying to keep up with the Jones. My wife was property manager for a large company. One of the properties in Orange County, New Port Beach area, had the highest rate of late payments and evictions. This is a A+ complex and has some of the highest rents for the units in the area. Guess what, those people that were late came in to the office with their bags from Nordstrom that they just came from in their BMW or MB asking for extendtions because they did not have the cash (but still had the CC to run up shopping). We as a country over all have made it okay for people not to be responsible for their actions and it will be our downfall. I agree with having the bankruptcy laws but we need to make it harder to get a reset whenthe cause of the situation was your own stupidity. I personally know people (Not friends) that have gone through bankruptcy 2 times, doing the same stupid shit the 2nd time as the first and it does not look like anything has changed with the last.

I personally know people (Not friends) that have gone through bankruptcy 2 times, doing the same stupid shit the 2nd time as the first and it does not look like anything has changed with the last.

The companies that lent them money for the second time should have gotten a clue, shouldn't they? Isn't this precisely what credit reports are for? It is definitely stupid to live over one's means and then go bankrupt, but it is just as stupid to lend money to people that have proven themselves irresponsible in the past, and so whoever lends to them should also suffer the consequences.

Oh they had a clue all right. They were charging the appropriate risk premium. People with bankruptcies are getting credit--expensive credit.

After seven years that data is removed from your credit report due to consumer protection laws. Its possible they had no idea, and even if they did its illegal for them to deny credit because of it if it was 7 years or more ago.

Do you have sources for your statement?

If a bad borrower keeps getting loans then it's the fault of the lender. We have nothing to gain by putting such moral weight on bankruptcy.

So the bankruptcy is removed from your report after 7 years. It is really simple to get credit after a bankruptcy because you have no debt. Stupid I know.

People are debt for all sorts of reasons, regardless of how you want to characterize it. Let's say your claims are generally right. But lenders are still willing to lend to people they probably shouldn't. And as long as they come out ahead overall they will continue to do so.

Regardless of what anyone says to the contrary, we all want the world this way. When we need credit or a loan, we want it to be easy to get because "we'll be responsible about it" and we don't want to be burdened with everyone elses irresponsible debt baggage.

If this was really a problem for lenders they would adopt different practices to avoid this sort of outcome. So instead they are happy to persist it and use whatever tactics they can to maximize their benefit. Lenders lend. They know the risks. They've been doing it for a long time. And they're smarter than you. I'm sure they appreciate your help in fighting their version of the good fight.

Most people aren't consciously running up debt with plans to declare bankruptcy. It happens, but they're not any sort of population to fall back on for an argument about a worldwide system of debt and lending. Using them is really an argument for your own ego and how you're a better person. Maybe you are. But it really has nothing to do with the other 7 billion primates on the planet.

Wow. A personal attack. Way to make a point, not.

There is this statement that about 60% of bankruptcy are from medical debt. Here is a quick over view of that number:

http://www.snopes.com/643000-bankruptcies-in-the-u-s-every-y...

So lets say it is true (it likely is) then what are the other 40% from?

The problem I have with your statements is that you make the companies out to be evil. They should know better and not lend anymore is what you are saying. However how does that work? Should that 60% that filled for the pure reason that someone got really sick not be able to get credit later? Should we have 2 classes of the ability to get credit after bankruptcy? "Okay, well it was medical so no issues. Hey looks like you spent to much but you learned you lesson this time so I guess I will give you a loan. Hey you seem to have not learned your lesson so no loan for you." This is a slippery slope. How does a company value all of this? The answer is they cannot really. There is math behind the lending and it is faceless and has to be because anything else is subjective and could be discriminatory.

This is no different then:

"Hey you should put limiters in to only let the car go the speed limit."

"Hey you had enough soda this week. No more for you."

The company that lends the money can only profile on the finances and payment history. Anything else is really out of bounds. It is not the lenders job to KNOW that you cannot control your spending and they are not EVIL because they do not do so. They are not your parents.

You are blaming the company for something that is the persons responsibility. No one is saying that there are not bad situations were bankruptcy is required. All I was saying that doing it should not be easy. There is a reason a judge is required to rule on this.

An economic argument would be that a customer defaulting now will signal to future lenders that they are a risky customer, leading to a raise in rates for future loans. The moral framework which says that defaulting is bad is in some way codifying the economic argument, by categorising actions that will lead to future difficulties as "immoral".

>they should not be ashamed or made to feel stupid for taking advantage of a legal option that has been priced into their loan via their interest rate.

This was well-said. Without the risk of default the loan would be worthless for the lender.