Bankruptcy Is a Moral Issue Only for the Little Guy

David DayenEvery lending contract in America has the potential for bankruptcy lurking in the background. Lenders — who as Trump said “aren’t babies” but “total killers” — are sophisticated enough to know about this option when they lend people money. In fact, they not only assume the risk of bankruptcy, but price it into the deal when they lend Donald Trump or anyone else money.

Morals do not enter into the equation. No lender thinks less of Donald Trump for using the bankruptcy process. They simply take their losses and move on.

In fact, only one group gets hit with this stigma. Only one group of people in America are denied this fully legal, fully rational, fully American opportunity to wipe the slate clean, and decried as deadbeats for even thinking about it: the homeowner of a primary residence, who by law cannot get mortgage debt discharged in bankruptcy.

—David Dayen
Going Bankrupt Like Trump Did Is for High Rollers, Not Homeowners

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