Refusals to pay are not the same as the inability to pay. Obviously, a refusal to pay would not be in “good faith” while being truly unable to pay could be.
I’d like to know what percentage of chronically delinquent accounts are approved for borrowers who eventually refuse to pay when they really can. That percentage should include student loan accounts where the borrower fits the same general profile.
One of my favorite cable shows was Airplane Repo, where a financial institution hires a team to legally “steal” airplanes, business jets, choppers and boats from rich deadbeats who refused to pay their bills. I think there might’ve been one deadbeat who agreed to the terms of repossession without objection, but it was he who decided to let it go to that extreme in the first place.
Student loan deadbeats have nothing to repossess, do they? Collateral is not required to qualify for student loans or is it? In some cases, garnishment of wages to repay student loans is possible. For private student loans, a lender must sue the responsible party and receive a court judgment before garnishing wages.
Whether it’s a home (or home improvement), aircraft, automobile, motorcycle, boat or a student loan, there should be additional consequences for borrowers who exhibit a pattern of outright refusal to pay. Let them have their day in court, but if they can afford to hire an attorney, then the defendant should be heavily scrutinized.
These deadbeats fit the same profile as bail jumpers to a certain extent, and if it ever came to a vote, I would be saying YES to Federal debtor prison(s).
I have no clue, but I will say this. I spent a couple of summers in the collections department of a bank over 45 years ago. Some of the movers and shakers in town were deadbeats in sense they didn't pay their bills on time. Pressed enough they would cough up the money. My job was to call them and remind them they were past due. When that didn't work, it got kicked up to the loan boss and beyond.