I was interested in finding out about student loan debt in the US. It's huge now, larger than credit card debt. Lots of young folks are starting out their professional lives tens (or more) of thousands of dollars in the hole.
While looking around on that topic, I ran across this bit of advice on how to address student loan obligations:
You want my advice? Having your student debts go into default is survivable.
In other words, default. Walk away. It will suck, but not as much as living with the weight of the loan obligation.
This made me think of my sister and brother in law, who, after 40 years of productive work life, are deliberately going bankrupt. They live in Phoenix, they took a ridiculous bath on the value of their house, they had some medical things come up, and they got so far behind that, at 60+ years of age, the simple math said they were never going to get on the good side of it.
So they're going bankrupt. And, they're not losing any sleep over it.
Likewise, my niece and her husband are jingle-mail veterans. They bought a nice house in Gilbert AZ, then they had twin girls and my niece couldn't work as many hours, then her husband's work got thin. And they couldn't make the mortgage.
So they walked away. Period. Packed up, rented an apartment, and mailed in the keys. Sayonara.
Walking away from debt obligations has become a reasonable and perfectly acceptable option, for millions of normal middle class working folks. I am quite certain that most folks reading this know, from their own lives, examples of folks doing this. I am quite certain that some number of folks reading this are making that choice, themselves.
What does it mean for our economy, our society, and our culture, that packing it in and walking away from your personal debt obligations has become a reasonable option?
What does it say about the relationship between folks who want and need to make use of credit, and their creditors?
What are the implications going to be, going forward, for folks who walk away from their debts? And, for the folks who *don't* walk away? And, for the folks who want to make loans to other people?
To me, this is an example of the fabric of what we have long accepted as normal life, fraying away.
And, in saying that, I have to say that I find it hard to blame most people who exercise that option. Financial institutions have almost gone out of their way in recent years to raise a huge middle finger to the rest of the nation. So, now, folks feel no personal compunction to hold up their end of the bargain, if it's going to wreck their lives to do so. Which, quite often, it would.
To close, here's a scary picture. If you think the federal debt load is heavy, the private debt load is much worse