I think a big part of that is the buy now pay later retail culture that is so prevailing in society today. Also in many ways it is easier for consumers to throw in the towel these days, especially with homes in this current economy. In many cases banks will not, or cannot send the former home owner a bill for any deficiency balance on the mortgage when the home is foreclosed.

Think about it. Almost everyone that purchases a new car is upside down in value the minute they drive away. Yet, how many people just toss the keys back to the dealer? Not many, even after a few years, they aren’t just walking away from their cars.

The reason is because they know the bank will go after them for the deficiency on the loan.

I think it all comes down to education, and that has been lacking in our public school systems. We don’t even teach basic financial concepts in high school. Yet people are shocked that consumers are irresponsibly borrowing money. Start educating the public and a lot of these problems will be dramatically reduced.
Damon Day´s last blog ..Debt Help – Who can You Trust

Now, I’m not opposed a public flogging (KIDDING!).
Cheapskate Sandy´s last blog ..Finance 101: What the Heck is Peer-to-Peer or P2P Lending?

That’s a very catchy title! I also don’t feel that debtors prison or serving time in jail is the solution for “strategically defaulting” on debts or loans.

This sort of thing is just more of the same – people’s “want” list being taken more seriously than their “needs” list, and they end up with a ton of debt they can’t possibly afford to pay off.

Maybe people would start taking debt more seriously if it wasn’t so easy to just file for bankruptcy and “start with a clean slate”. Maybe if people were turned down when trying to file for bankruptcy, people might realize they have no choice but to pay off the debts and bills they CHOSE to accumulate, and learn to live within their means (or BELOW their means) instead of trying to keep up with the Jones’es.

I guess I’m in the minority along with my Canadian friend – I don’t think that debt or bankruptcy are moral issues. Bankruptcy exists because some debts cannot be paid off, and creditors need another way of getting some of their money back. When an institution lends you money they are aware that there is always a risk that you will default.

I do think that recovering from bankruptcy is and should be timeconsuming, but that’s because if you’ve defaulted on your debt there’s a possibility you might do so again.

People don’t take debt seriously! Everyone has it and why should I be any different? I think one think that really hit hard for me is when we bought our home, the debt was huge in and of itself, but when I saw some of the paperwork showing how much the final cost would be if I made minimum payments for 30 years at the interest rate, I was shocked to think I was in that much debt.

I think most people just turn a blind eye to debt, use it and forget about it while making minimum payments. If more people took it seriously, maybe they would save beforehand and end up without so much debt.
Jesse´s last blog ..Review & Giveaway: Secrets of a Stingy Scoundrel

I don’t see anything wrong with “strategically” doing anything. If you borrow money from an institution you have an obligation to yourself to pay the money back if you can. If you can’t pay the money back then you have to look at alternate solutions which could include walking away from a house, bankruptcy, working out a deal with the bank etc.

Banks make money from lending and along with that profit comes risk. The bank has an obligation to its shareholders to maximize profit, reduce risk, stay solvent etc.

The homeowner also has an obligation to its shareholders (themselves) to maximize profit, reduce risk, stay solvent etc.

Sometimes it just doesn’t work out. The owners knew the risks involved with the mortgage (credit rating etc) and so did the banks.
ABCs of Investing´s last blog ..More Exciting Facts About Stock Indexes