5 ms·
In many countries there is the idea of bankrupcy. You make the debtor suffer for a couple of years (to ensure incentive against it) and then wipe the slate. Ba
by ArnoVW 2y ago
In many countries there is the idea of bankrupcy. You make the debtor suffer for a couple of years (to ensure incentive against it) and then wipe the slate.
Bankrupcy is no fun. All your assets are wiped out (house, cars, etc). Sometimes you are excluded from the banking system. So it's not "without consequence".
Lending money is a risky business. That is why you get interest. Getting people off the hook is not ideal, but neither is the inverse. From a societal point of view, this arrangement allows people to take risks that they may not have otherwise. And we're all better off because of it.
- arrowsmith 2y agoDo some countries not have a concept of bankruptcy?
- kome 2y agoI would say, most of countries in Europe do not have bankruptcy laws that are lenient like in the US.
- throw__away7391 2y agoMost of Europe does not have bankruptcy laws comparable to the US. Technically they do exist but the differences in the details are so large they may as well be called two different things.
- scherlock 2y agoAlso, the reason people go bankrupt in the US are very different than the reasons people go bankrupt in Europe. 2/3 of personal bankruptcy in the US is linked to medical debt somehow. That is not the case in Europe.
- threemux 2y ago> 2/3 of personal bankruptcy in the US is linked to medical debt somehow Often cited, but wrong. When you dig in, it turns out to be one of those "wet streets cause rain" causal mix-ups: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5865642/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5865642/
- itronitron 2y ago>> "wet streets cause rain" So are you saying that 2/3 of personal bankruptcy cause medical debt?
- threemux 2y agoNo I'm saying that the conditions that lead to one declaring bankruptcy can also cause one to rack up medical debt.
- hklgny 2y agoHaving medical issues and no way to pay for them?
- shadowgovt 2y agoMore that bodies respond to stress of all forms and people who have a failing business might push themselves beyond reasonable healthy limits to avoid that outcome, leaving them in a situation where their finances are wrecked just in time for all the chickens they stored up not getting enough sleep, pulling a double shift, working through the pain, etc. to come home to roost.
- tialaramex 2y agoWhile this article points out some potential problems in the methods used to derive that headline political figure, its own methodology seems to have pretty serious flaws. The most I'd take from this is "This is such a bad problem that even when you try pretty hard to look in the wrong place you find it anyway". This study deliberately does not - just for example - count it as a "medical bankruptcy" if you weren't hospitalized. So magically every person who was bankrupted by the cost of their must-take prescription medicine, they don't count because they need to be admitted to hospital to count for this study.
- threemux 2y agoThe thing to take from it is not that the figure the linked study arrives at is "right", but that the cited 2/3 figure is seriously flawed to the point that it shouldn't be cited. As it is, the 2/3 statistic is mainly used to score political points and indeed one of the authors of the original study that came up with the 60% number is Elizabeth Warren. Now, you could say she participated in her capacity as an academic, but I personally have a hard time believing she would have put her name on the paper if it had found, say, 4% of bankruptcies came from medical debt.
- eadmund 2y agoAnd even were it true, would it necessarily be a bad thing? Personal bankruptcy is an orderly process in which an individual gets to legally terminate all his debts. If a person with medical debt declares bankruptcy, his creditors lose out but he still has all the medical treatment he went into debt for. He still has all the non-bankruptcy-liable assets (e.g. certain pension and retirement benefits, and in many states his home and vehicle) he started out with. Medical bankruptcy isn’t really the problem. Medical insolvency might be, but the two alternatives are not to receive treatment at all, or for the State to pay for it. The former is obviously worse, and the latter is arguably worse when looked at in toto.
- pdimitar 2y agoHere in Bulgaria we only technically have bankruptcy but it's extremely different from the USA. Long story short, a judge plus two gorillas can and will confiscate every single thing you own and then put you in jail. Bankruptcy is not a "haha, you'll never get me!" card like it's in the USA. It's actually diametrically the opposite.
- cutemonster 2y agoHow long do you stay in jail?
- pdimitar 2y agoHaven't checked in a long time but I remember you can easily have 2-3 years with only 6 months in actual jail. But it leaves a lasting stain on you, after that nobody will want to give you money for a while. At least 5 years I think.