And it creates a perverse incentive.
Parents should be teaching kids to own up to their actions, but when the kids do own up, the parents are financially penalized for it.
Why should the parents help their kids take responsibility, when it will cost them their house, their car, their retirement fund, their life savings…? I’d be very tempted to become an accomplice and help the kid hide what he’s done (and hey, if I’m caught, at least I have a place to stay after they foreclose on my house).
