Those who have been rejected for an insolvency arrangement (or otherwise left, dropped out, or stopped their application) now have very limited options. Occasionally a person in this situation will drop out because they have returned to solvency, and their purgatorial experience of indebtedness becomes a bad memory that is eagerly forgotten. Unfortunately, recovery is rare, and we must now contend with the fates of those who are left behind. When faced with a hopeless situation, we are likely to ask why the debtor should not simply give up and ‘hand back the keys’, as the adage goes. Policy makers, scholars, and professionals alike continue to be astounded by the willingness of debtors to take a punishment that will have no end, when letting go should seem to be the only rational course of action (Babb 2005; White 2010; Atfield and Orton 2013; Lazzarato 2014).

In this chapter, I offer my own explanation – that the ongoing resilience of debtors is animated by cruel optimism – which occurs when what we desire is ultimately an obstacle to our flourishing (Berlant 2006, 2011). In Chapter 3 we encountered the good life, a fantasy that outlines how we can live well, and which goes beyond mere financial success and into milestones and achievements that should bring fulfilment and happiness (Forkert 2016; Bramall et al 2016a). In service of the fantasy of homeownership, debtors acquired mortgages, hoping for a place to raise their children and eventually retire before passing on an emotionally laden asset to those children (Keohane and Kuhling 2014; Szakolczai 2014). As the fantasy comes under increasing threat from mounting debts which seem to have no solution, more extreme behaviours become justifiable. Prized possessions are sold, houses are stripped bare, second jobs are sought out, and the use of charitable services becomes more common as the debtor is unable or unwilling to see the cost of holding on to their fantasy of the good life.

Concurrently, debtors begin a process of scapegoating, rejecting insolvency as illegitimate and casting blame on the political system and their creditors; however, perhaps most remarkably, the greatest hatred is reserved for other debtors.