> I know several people in Denmark that were “stuck” with the house they were in after the price drops from the 2008 crisis until prices rose above the mortgages again.

My brother was hit too, though I can't recall the exact year.

He ran a small profitable business in the Copenhagen area but was hit badly by the downturn in the economy. He eventually ended up selling at a loss (I think) and moved north with his family so now they also live in Norway.

Bankruptcy has a 7 years bad credit sentence in US. You are good as new after that. Not sure that's the case with other countries.

In Norway, personal bankruptcy requires an application to the debt enforcement office (a local government authority). If the application is accepted, the debtor gives up all their assets and submits to paying all of their earnings towards their debt, for five years. A politically determined subsistence sum is all they get to keep for themselves.

After five years, the agreement ends and the debt is cleared. Each person can only apply once in their life. Any future runaway debts cannot be cleared without the consent of each creditor, which probably won't happen. Unsure how this is done in the rest of Scandinavia.

Yikes. As an American, I would have thought Norway would have a much more lenient form of debt relief based on everything I hear about Scandinavia from our local press. But what you're describing seems incredibly harsh. I wonder if this is why Norwegians tend to be more financially responsible. Only being able to declare bankruptcy once certainly would make people learn their lesson? Is that true? Does it work in practice?

In the US, bankruptcy is often used as an instrument of the wealthy, to escape earlier risky bets. And in some cases, to avoid taxes.

Having such a severe punishment is probably more of a deterrence against risky behavior in the upper 5% of society, rather than a burden on the impoverished.

Without knowing anything about it, I would assume that the politicially-negotiated subsistence amount is probably quite lenient to lower-income folks.

An honest assessment would conclude that our laws are too creditor friendly. They allow lenders to take on more risk than they otherwise would have.

I don't know how our delinquency rates compare to the rest of the world, but there's quite a bit of it. My take is that these laws are due to somewhat unflattering protestant cultural heritage, rather than a deliberate decision to encourage financial responsibility. I struggle to see how the possibility of lifelong debt slavery is moral.

I mean... I agree with you. I like Norway's model... Please don't be so confrontational.

Oh, it wasn't meant to be confrontational towards you. Sorry that that's how it came across. If it ended up sounding a bit harsh, my annoyance was directed towards the legal system.

It's just - I do have a bit of a problem with the underlying morality of this system, and our (Norway's) culture is so homogenous that few locals ever question these things. It's refreshing to share this on a forum where lots of people are curious and have an open mind.

It's not like this is a massive social problem. People who end up in this kind of misery still have a roof over their heads and get to eat and have good healthcare access. But they wouldn't really expect to ever get back on their feet status wise, and that's sad.

Don't use your credit card as a free money ticket and you should be fine

> Norwegians tend to be more financially responsible

I'd say that's being responsible, period. A lot of Americans aren't

Many countries don't have the concept of private bankruptcies at all. You may effectively be on the hook for the rest of your life if you really messed up. Don't know about Denmark though.

In Denmark you cannot just declare personal bankruptcy.

You can ask a court to declare you bankrupt, but there are many requirements and rules. And the court may reject your application.