[zo1]

Bankruptcy is such an alien concept. Adults took out consensual loans from another adult and now they get to just say oops "take backsies"?

It's one thing if you're in a crazy desperate situation and someone takes advantage of you, I could get that. But if you're not desperate and you took money from someone else and can't pay it back? Theft.

The rest is just how we manage to keep that low on an aggregate level in our society that takes care of our own - which we want to do.

[nixon_why69]

The idea is that its better for society to hit the reset button, pay creditors what they can be paid out of liquidation, and potentially have a productive member of society instead of somebody with absolutely nothing left to lose and maybe some grudges.

It's not like bankruptcy is painless.

[CamouflagedKiwi]

They don't really "just get to say" that. Declaring yourself bankrupt is a fairly major thing that will have long-term consequences. It clearly isn't desirable to do casually, we don't see it often (at least not in the personal sense; businesses can be a bit different).

> It's one thing if you're in a crazy desperate situation and someone takes advantage of you

In that kind of situation, declaring bankruptcy is likely not going to help you so much. Those people are going to come after you anyway.

I think you sort of fundamentally misunderstand this. Bankruptcy isn't thievery - it's a solution for people who get themselves into a bad situation and don't have a way forward. Say you bought a house with a mortgage, the value of the house has now dropped for some reason so you have negative equity, and you lose your job and can't afford to make the repayments any more. What should happen? You don't have money to pay what you owe, and you can't get it because your total net worth is negative. Saying that's theft doesn't help the question of what to do - society doesn't benefit from dumping on that poor person any more.

[yardie]

Well the alternative is people do rational things like self emolate, self defenestrate, suicide, and familicide. During the ‘08 financial crisis I was reading horror stories of Spanish debtors topping themselves because financial fuckups in NYC, London, and Madrid caused a problem other people had to pay for.

[technothrasher]

> But if you're not desperate and you took money from someone else and can't pay it back? Theft.

Bankruptcy is a civil matter, not a criminal matter. Charging somebody with theft, whether appropriate or not, does not resolve the civil debt. So, they are convicted of theft and still haven't paid back their debt. Then what? Fine them? Seems pointless in a bankruptcy situation. Indentured servitude? Slavery is not ever a winning argument. Debtors' prison? That just shifts the indentured servitude to the state, has been tried extensively throughout history, and doesn't actually make things better. Bankruptcy as as solution acknowledges that the situation is unwinnable and starting over from nothing, with a public notice to others to be wary about extending credit, is likely the only way out.

[Muromec]

The goal of having laws is as much about being fair as it is about having a society that can function. Aka "the target amount of fraud is not zero".

Sometimes it's better for both parties to cut their losses and move on to do better things.

Looking at this from the other angle: if value can be created out of nothing it can also disappear into nothing when investment fails.