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> I have a debt, I cannot pay the debt. What do you suggest as an alternative to bankruptcy? Indentured servitude? wage garnishment. take some $ from each payc

> I have a debt, I cannot pay the debt. What do you suggest as an alternative to bankruptcy? Indentured servitude? wage garnishment. take some $ from each paycheck automatically deducted from payroll. i believe credit card companies and other debtors can do this

imtringued 6y ago
That's basically what bankruptcy is but with a limited duration.
mywittyname 6y ago
Things like this encourage irresponsible lending. Credit card companies created a bunch of services designed to "help" you get out of debt without declaring bankruptcy. Which is really just a way to keep debtors tied up paying on a debt they can never pay back for as long as possible. To the point where the total interest payments and arbitration fees exceed the interest and principal on the initial loan. Bankruptcy is an important part of capital markets. It's there to make clear the risks of lending to people who don't have the ability to pay back the loans. The more difficult it becomes to declare bankruptcy, the more predatory lending becomes. If you knew it was impossible for someone to declare bankruptcy, why wouldn't you loan as much as possible to them? This is exactly how we got into a student loan crisis. If debtors could declare bankruptcy, then lenders would be much more judicious with their money. But as it stands, there's no real risk to giving an 18 year old hundreds of thousands of dollars in loans because it's practically a guarantee of 7% interest payments for 20+ years.
- leetcrew 6y ago
  > If you knew it was impossible for someone to declare bankruptcy, why wouldn't you loan as much as possible to them? This is exactly how we got into a student loan crisis. If debtors could declare bankruptcy, then lenders would be much more judicious with their money. But as it stands, there's no real risk to giving an 18 year old hundreds of thousands of dollars in loans because it's practically a guarantee of 7% interest payments for 20+ years. so first of all, the reason there's no risk in student loans is because the servicer doesn't actually lend their own money; they just manage the loan for the government. second, bankruptcy isn't the only risk you take when you make a loan. there's always a chance that the person simply won't make enough money in their natural life to pay back the principle. $100k, you will probably get back in interest over many years. but if you loan $1mm, you might never recover the principal.
toast0 6y ago
A chapter 13 bankruptcy has a up to 5 year payment plan which is sort of what you're asking for. A lender can sue for repayment, and get that enforced through garnishment, but the debt can be discharged through bankruptcy. Credit card lenders are generally unsecured debt, so if the debtor doesn't have enough assets, they'll get nothing; it's in such lenders' interests to avoid a bankruptcy filing.

imtringued 6y ago

That's basically what bankruptcy is but with a limited duration.

mywittyname 6y ago

Things like this encourage irresponsible lending. Credit card companies created a bunch of services designed to "help" you get out of debt without declaring bankruptcy. Which is really just a way to keep debtors tied up paying on a debt they can never pay back for as long as possible. To the point where the total interest payments and arbitration fees exceed the interest and principal on the initial loan. Bankruptcy is an important part of capital markets. It's there to make clear the risks of lending to people who don't have the ability to pay back the loans. The more difficult it becomes to declare bankruptcy, the more predatory lending becomes. If you knew it was impossible for someone to declare bankruptcy, why wouldn't you loan as much as possible to them? This is exactly how we got into a student loan crisis. If debtors could declare bankruptcy, then lenders would be much more judicious with their money. But as it stands, there's no real risk to giving an 18 year old hundreds of thousands of dollars in loans because it's practically a guarantee of 7% interest payments for 20+ years.

leetcrew 6y ago
> If you knew it was impossible for someone to declare bankruptcy, why wouldn't you loan as much as possible to them? This is exactly how we got into a student loan crisis. If debtors could declare bankruptcy, then lenders would be much more judicious with their money. But as it stands, there's no real risk to giving an 18 year old hundreds of thousands of dollars in loans because it's practically a guarantee of 7% interest payments for 20+ years. so first of all, the reason there's no risk in student loans is because the servicer doesn't actually lend their own money; they just manage the loan for the government. second, bankruptcy isn't the only risk you take when you make a loan. there's always a chance that the person simply won't make enough money in their natural life to pay back the principle. $100k, you will probably get back in interest over many years. but if you loan $1mm, you might never recover the principal.

toast0 6y ago

A chapter 13 bankruptcy has a up to 5 year payment plan which is sort of what you're asking for. A lender can sue for repayment, and get that enforced through garnishment, but the debt can be discharged through bankruptcy. Credit card lenders are generally unsecured debt, so if the debtor doesn't have enough assets, they'll get nothing; it's in such lenders' interests to avoid a bankruptcy filing.