Can Danes just walk away from their loans simply returning the home? I believe that's true in the US, but I don't think that's universal.
Home mortages are recourse loans in all but 12 states (Alaska, Arizona, California, Connecticut, Idaho, Minnesota, North Carolina, North Dakota, Oregon, Texas, Utah and Washington).
I know several people in Denmark that were “stuck” with the house they were in after the price drops from the 2008 crisis until prices rose above the mortgages again.
You can probably make a deal with the bank somehow at higher interests, but they’ll want there money back.
You can also declare bankruptcy, but that is not simple and not without long term consequences I think.
You can ask a court to declare you bankrupt, but there are many requirements and rules. And the court may reject your application.
After five years, the agreement ends and the debt is cleared. Each person can only apply once in their life. Any future runaway debts cannot be cleared without the consent of each creditor, which probably won't happen. Unsure how this is done in the rest of Scandinavia.
Having such a severe punishment is probably more of a deterrence against risky behavior in the upper 5% of society, rather than a burden on the impoverished.
Without knowing anything about it, I would assume that the politicially-negotiated subsistence amount is probably quite lenient to lower-income folks.
> Norwegians tend to be more financially responsible
I'd say that's being responsible, period. A lot of Americans aren't
I don't know how our delinquency rates compare to the rest of the world, but there's quite a bit of it. My take is that these laws are due to somewhat unflattering protestant cultural heritage, rather than a deliberate decision to encourage financial responsibility. I struggle to see how the possibility of lifelong debt slavery is moral.
It's just - I do have a bit of a problem with the underlying morality of this system, and our (Norway's) culture is so homogenous that few locals ever question these things. It's refreshing to share this on a forum where lots of people are curious and have an open mind.
It's not like this is a massive social problem. People who end up in this kind of misery still have a roof over their heads and get to eat and have good healthcare access. But they wouldn't really expect to ever get back on their feet status wise, and that's sad.
My brother was hit too, though I can't recall the exact year.
He ran a small profitable business in the Copenhagen area but was hit badly by the downturn in the economy. He eventually ended up selling at a loss (I think) and moved north with his family so now they also live in Norway.
https://www.financialsamurai.com/non-recourse-states-walk-aw...