By Diana Hsieh
In last Sunday's Rationally Selfish Webcast, I discussed the purpose of bankruptcy law. The question was:
What is the proper purpose of bankruptcy laws? When should a person renegotiate his debt with lenders, if ever? Should a person be able to wipe his debt clean by going into bankruptcy? In your July 10, 2011 webcast discussion of strategic default on mortgages, you suggested that a person shouldn't be able to do that, but shouldn't lenders be responsible for who they lend money to?My answer, in brief:
The purpose of bankruptcy law not to give people a fresh start, but rather to peacefully and fairly resolve conflicts that arise between the debtor and his creditors when the debtor is truly unable to pay his debts.Here's the video of my full answer:
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