Here’s an interesting story on how Iceland handled its 2008 collapse.
The government shut down the banks and walked away from all its debts. The upside… the government is debt free. The downside… most citizens will never get out of debt due to the devaluing of the krona. There was however, no street chaos or civil disruption.
There’s a moral cost to walking away from debt. There’s also a high cost to standing on a debtor’s neck and not letting him breathe.