Never forget that the term "moral hazard" has—until very recently—referred to policies that increase the dangers posed by reckless lenders. The realization behind this expression was that the existence of an onerous collections regeime would tempt creditors into making otherwise indefensible loans.

I won't say the victims of predatory lending have a moral obligation to default, since this could get them killed. But in the absence of good government, this is the only way to drive predatory lenders out of existence.

And yes, good governance includes making life unprofitable for loan sharks.