[Alberta's Child]

Good point, but look at the flip side of this. At one time the sage advice given to someone facing serious financial troubles was that the mortgage should always be paid, and that other debts were secondary. "Don't lose the house," was the prevailing wisdom at the time.

Once Congress passed laws that made it more nearly impossible to discharge credit card and student loan debt in bankruptcy court, they basically turned the whole system upside down. One of the important factors in the collapse of the mortgage industry in recent years is that a mortgage became one of the easiest forms of debt for someone to walk away from.

If someone in this woman's situation came to me for advice, I'd tell her to take out a second mortgage or home equity loan (or have her parents do it, if she doesn't own her home), pay off the student loan, and then mail the house keys to the bank. Case closed. Go to the head of the class, young lady!

[KantianBurke]

“One of the important factors in the collapse of the mortgage industry in recent years is that a mortgage became one of the easiest forms of debt for someone to walk away from.”

Define easy. And you wouldn’t chalk the industry’s collapse up to (1) oversupply of homes & (2) market value collapse??