They can. This is the distinction between unsecured and secured debt (outside of your primary residence, which has special protections). For most unsecured debt

They can. This is the distinction between unsecured and secured debt (outside of your primary residence, which has special protections). For most unsecured debt, an individual can get it wiped out in bankruptcy court. The main exception to this is student debt. Good luck ever getting any type of loan for the next decade or so though. This is what's called Chapter 7 in the US. There's a means test here ostensibly to prevent abuse. There's also Chapter 13, which is more of an adjustment plan. You keep your assets, but you agree to pay some portion of your debts over 3 to 5 years. If you don't make your payments, the judge can dismiss the plan and creditors can pursue you under state law for the debt. https://en.wikipedia.org/wiki/Bankruptcy#Chapter_7 https://en.wikipedia.org/wiki/Bankruptcy#Chapter_7