I recently read quite an interesting article about Dubai, I found it interesting because it focused on a different side of Dubai we never hear about, the bad side. One of the interesting stories was about a husband and wife who ran into some debt and were not able to pay it off, the husband was thrown in jail. In Dubai the concept of Bankruptcy does not exist, if you have debt and cannot pay it you simply go to jail. I was surprised to find out such harsh measures for owing debt, although I found this strange at first after some thought the idea sounded very ….interesting. This sparked a little debate between the fiancé and me.
My Side-Good Idea
I think a prison sentence for those who go bankrupt can be a good idea. I know this sounds extreme, but think about it for a second. In North America there really isn’t any punishment for those who are irresponsible with their money and loans, it will affect our credit but that’s pretty much it. Isn’t the whole reason for this major crisis over-leverage and irresponsible money management? We have hit all time high in debt-income ratio in US and Canada people just don’t seem to take debt seriously and we are reaching record bankruptcy level. I believe if there were some serious consequences, people would handle debt much more responsibly.
Her Side- Bad Idea
She did not like the idea at all. Her argument is that, it is cruel to punish someone so severally for debt. Everyone should have an opportunity to make up for the mistake and if you put someone in jail how would they be able to work and pay off the debt? She argues that if you sentence them to jail the money they owe is lost and no good comes from it.
I can understand that it is an extreme measurement and I do not expect any government to implement it, nevertheless I think it’s an interesting thought. If one knows they will end up in jail if they go bankrupt, people will avoid debt in the first place. If they do have debt they will take it much more serious and try to keep it to a minimum. I know many who have racked up tones of debt and declared bankruptcy to avoid paying it back. I know there are certain situations where things happen that are out of your control, like getting seriously ill and not being able to work, but if proper financial planning is done then you would have insurance for the unforeseen events.
I know there is many reasons why this would not be practical such who pays for court costs? Tax payers money is wasted on court fees and jails. I thought it was an interesting idea and we had a good debate so I thought I share and see what everyone else thinks about it.
So what do YOU think? Should those declaring bankruptcy be sentence to prison?