I am glad you and your family were able to work your way out of the debt you found yourself and I commend you for it. Many others are not able too. Provided they did not get themselves into debt just to keep up with the Joneses' while living on credit cards, they should not be ashamed or made to feel stupid for taking advantage of a legal option that has been priced into their loan via their interest rate.
You talk of doing the math and taking a bet on your loan. The lenders do the same math and take the same bet. They just don't apply any moral imperative to their actions.
Life happens, and at the end of the day their is no shame in looking at the math and your situation and determining that the numbers don't add up and its time to reset.
The companies that lent them money for the second time should have gotten a clue, shouldn't they? Isn't this precisely what credit reports are for? It is definitely stupid to live over one's means and then go bankrupt, but it is just as stupid to lend money to people that have proven themselves irresponsible in the past, and so whoever lends to them should also suffer the consequences.
Regardless of what anyone says to the contrary, we all want the world this way. When we need credit or a loan, we want it to be easy to get because "we'll be responsible about it" and we don't want to be burdened with everyone elses irresponsible debt baggage.
If this was really a problem for lenders they would adopt different practices to avoid this sort of outcome. So instead they are happy to persist it and use whatever tactics they can to maximize their benefit. Lenders lend. They know the risks. They've been doing it for a long time. And they're smarter than you. I'm sure they appreciate your help in fighting their version of the good fight.
Most people aren't consciously running up debt with plans to declare bankruptcy. It happens, but they're not any sort of population to fall back on for an argument about a worldwide system of debt and lending. Using them is really an argument for your own ego and how you're a better person. Maybe you are. But it really has nothing to do with the other 7 billion primates on the planet.
There is this statement that about 60% of bankruptcy are from medical debt. Here is a quick over view of that number:
http://www.snopes.com/643000-bankruptcies-in-the-u-s-every-y...
So lets say it is true (it likely is) then what are the other 40% from?
The problem I have with your statements is that you make the companies out to be evil. They should know better and not lend anymore is what you are saying. However how does that work? Should that 60% that filled for the pure reason that someone got really sick not be able to get credit later? Should we have 2 classes of the ability to get credit after bankruptcy? "Okay, well it was medical so no issues. Hey looks like you spent to much but you learned you lesson this time so I guess I will give you a loan. Hey you seem to have not learned your lesson so no loan for you." This is a slippery slope. How does a company value all of this? The answer is they cannot really. There is math behind the lending and it is faceless and has to be because anything else is subjective and could be discriminatory.
This is no different then:
"Hey you should put limiters in to only let the car go the speed limit."
"Hey you had enough soda this week. No more for you."
The company that lends the money can only profile on the finances and payment history. Anything else is really out of bounds. It is not the lenders job to KNOW that you cannot control your spending and they are not EVIL because they do not do so. They are not your parents.
You are blaming the company for something that is the persons responsibility. No one is saying that there are not bad situations were bankruptcy is required. All I was saying that doing it should not be easy. There is a reason a judge is required to rule on this.
If a bad borrower keeps getting loans then it's the fault of the lender. We have nothing to gain by putting such moral weight on bankruptcy.
This was well-said. Without the risk of default the loan would be worthless for the lender.
[0] http://www.goodreads.com/book/show/26593431-the-new-confessi...
that said, fair enough, i was more discourteous than i needed to be in getting my message across, i apologize for that.
My wife and I at one point were in the hole nearly 1m. The crash put my house way under and the job money fun time went away. It sucked. You know what we did. We canceled the cable TV, we stopped eating out. We watched every penny. I work jobs I hated, hated, hated. We got credit councling and got on a plan with them and stuck to it. We paid our debt.
I am by no means saying that banckrucy should not be an option in some cases. Our medical systems is a mess and that is a huge cause of banckrucy. However let's be clear people signed those loans without understanding it and it is their fault. I knew the cost of the interest only loan I had. I got burned but it was a bet I entered after doing research and math, etc. When it did not work out I sucked it up and delt with it.
I agree that some companies did some shady stuff, but really? You get something to good to be true and you don't question it? The consumer has to take some responsibility for their actions.