[Christien]

But you do raise a good point. If there's no "bottoming out" whereby nobody will rent you an apartment or finance you a car, what's to stop people from just continuously writing off debt?

I think one way it works (and here's my really cynical side coming out) is that the vast majority of people in these situations are just too plain dumb to understand how the system works well enough to take advantage of it.

If you had no pride or dignity and didn't really care about standard of living, you could theoretically get welfare and only occasionally pay rent or bills and continuously just find new sources of credit, then declare bankruptcy every couple years. I suppose eventually you'd make the rounds of ALL the credit sources and they'd learn your name, but it would take a long time.

Then again, if you were that clever, you'd probably just find more creative ways of making money.

I guess one of the hardest things to understand is the complete lack of dignity and pride to just say "screw it, I'll declare bankruptcy a third time". And remember, she's only 33, so has only really had a working live of 15-20 years. What the hell is she going to be like when she's 60?