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Comment by engineer_22 | Hacker News Reader

My parents went through a bankruptcy when I was a boy, they lost everything. All the assets of the business they owned were auctioned by the bank right from the property we lived on. We were thrown out of our house in the middle of a cold March. I remember a lot of what happened and what that felt like. Even as a child it was no fun. Mom says just focus on making it through one day at a time, it's gunna be a bumpy ride, just hang on. Things will happen that make you uncomfortable. Then you'll get to a "new normal", and you can start to rebuild from there.

For practical money advice during a crisis seek out Dave Ramsey. He's gotten a lot of people through this type of thing and went through it himself. Good luck. Don't buy a shotgun.

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I went through a personal bankruptcy when I was younger (Ch. 7 due to 2008 collapse), it was no big deal. Paid the attorney, had all of my debt wiped out and re-assumed the mortgage and car payment. I did not have a business so different experience than your parent. If you have few assets and very limited income a BK can be a good option.

Don't get me wrong, it was not something I felt good about but sometimes you absolutely need a reset and it does not make sense to suffer financially for decades when a viable solution presents itself. From a purely logical perspective it can often make sense.

For those who need and heed this advice, there is a YC backed 501c3 nonprofit called Upsolve who will help you through your bankruptcy filing. Please do not fear bankruptcy if you need this type of economic relief.

https://upsolve.org/

https://news.ycombinator.com/item?id=18980861

> it was no big deal. Paid the attorney, had all of my debt wiped out

Right here is the problem with the US. Why should all your creditors need to pound sand for your financial mismanagement? I'm okay with deferred payments, restructuring, and other types of payment plans but why do we allow people to wipe their slates clean?

It's legalized theft.

It's actually part of the debt contract. So no, not theft.

Sure, that is definitely one way to look at it. What is wrong with America is that we are too easy on those in poor financial shape and we should crack down on them.

Another way to look at it is sometimes either through bad choice or unfortunate circumstance people get into financial trouble. Not everyone has wealthy parents or a network they can fall back on. By not allowing people to reset you are creating an indentured class. What of those unable to pay? Should we send them to prison? Perhaps garnish their wages in perpetuity? What if they become pregnant or sick after falling into debt? By not allowing a way out you are creating a slippery slope towards forced labor.

Not allowing bankruptcy also closes the door on entrepreneurship for anyone in a low income bracket or without rich parents. They cannot take a business loan as the risk of failure means they are forever indebted.

All roads lead to the rich getting richer and the poor getting poorer.

Note: If its legal it cannot be theft by definition.

The creditors need to "pound sand" because they accepted the risk in exchange for an interest payment.

Here's my problem with the US, why do people feel the need to defend companies that have all the tools in evaluating risk in lending and dealing with payment delinquencies?

"Oh legalized theft". So, cash advance abusive loans aren't? Overdraft fees (and the ways bank forces an overdraft)? Wage theft? Patent trolling? ATM fees?

Even more naive than that is thinking the bank is losing money at the end. Sure, they might lose money on one lending operation. But they know how many people are going to pay back or not. If they don't they have multiple ways of losing much less than the nominal value.

All businesses have a risk and I guarantee the bank knows that better than people who defend them.

It’s also their mismanagement. If I loan you money, and you can’t pay me back, I should have done my homework. If you don’t like those rules, I shouldn’t loan money.

It comes down to how much you are hurt. You can cripple me financially for life with a $150k loan I can’t pay back because I can’t get the kind of job that pays enough.

Option a: I pay most of my income for life and end up only paying interest, never make headway. My life is ruined, the bank doesn’t care.

Option b: the bank has to eat its small investment. Nobody is fucked, maybe one guy is fired if he does this repeatedly.

Massive difference in outcomes for society.

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