Bankruptcy is the alternative. There are legal system problems. The guy who loaned my mortgage has a good idea if I'll pay him back and even then its barely f

Bankruptcy is the alternative. There are legal system problems. The guy who loaned my mortgage has a good idea if I'll pay him back and even then its barely financially sustainable. Making my plumber go thru the same credit gyrations to figure out if I'm about to get into a car wreck and need to declare bankruptcy because I can't pay my car loan without a car and the side effect of that bankruptcy is the plumber gets stiffed as yet another unsecured creditor is asking too much to get a toilet installed and a bill sent. The cost of doing all services as cash and carry is too high especially for general contractors. Imagine a GC on a jobsite having to do payday at the top of every hour handing out cash to every sub. bankruptcy works as a social policy for financial disasters but applying them to other disasters is a mess. Its more disruptive to have a financial system clogged with bankruptcies due to wild fires destroying homes than to just balance it all out via insurance payments. You could kinda sorta work around it by exploding the concept of government disaster area financial giveaways to include fender bender car accidents but the government is incredibly inefficient compared to letting little insurance companies provide basically the same service. It would be like calling for a Marine Amphibious Assault Force because a neighbors dog pooped on my lawn. Banning insurance like behaviors like church food banks would be problematic. Things start scaling up and at some arbitrary point between soup kitchens and current day Catholic Financial Life Inc you'd have to draw a contentious line. Another similar solution to bankruptcy would be making past due accounts disappear rather than living forever. I had a girlfriend who was judgment proof and didn't make nearly enough money to get health insurance and wasn't set up under medicare either long before obamacare back when most 20-somethings spent some time uninsured. Anyway the collections people tried to collect, but she had nothing, not even worth garnishment, so eventually the debt just disappeared. Without collections agencies, if collecting were more expensive, the end result would likely be a lot of small businesses losing money and the destruction of the credit system oriented economy, which would probably be a net long term positive.