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Isn't the fact that you can go bankrupt in the first place displaying a problem in our financial system? The system should be such to protect the citizens from
by gchamonlive 7y ago
Isn't the fact that you can go bankrupt in the first place displaying a problem in our financial system? The system should be such to protect the citizens from going bankrupt, at least with efforts comparable to what lengths government go through to save banks from bankruptcy.
- bb88 7y agoSo there's this term called "Moral Risk". It means if there's no consequence for one's financial actions, then a person is likely going to do it over and over again. Bankruptcy is one form of this. Corporate and bank bailouts are another form. I'm not going to go into the politics and history like debtor's prisons, but to be honest, bankruptcy is not a cakewalk either.
- travbrack 7y agoSuppose someone invests all of their savings into a restaurant that flops and they end up to their eyeballs in debt and declare bankruptcy. What did the government do wrong?
- kube-system 7y agoBankruptcy is a consumer protection. It gives people buried in debt an out, and it also discourages the banking system from making predatory loans. I can’t think of any alternatives that accomplish both of these things.
- Sangama34 7y agoBankruptcy protects the citizens. In fact it should be simpler to go bankrupt and come back.