Halakhah says the loss is not going to be suffered by the creditor but the loss will in effect be shared by society as a whole. It's really the theory of loss spreading like insurance. Insurance is often described as a loss spreading mechanism, that instead of one person suffering a catastrophic loss, all of society through premiums bear a little bit of that loss. I would describe the halakhic debt collection system that way as well. Which means, if you only look at it in terms of a creditor and a debtor, it looks like we have a fairly hard headed system.
Debtor has no means of escape.
But if you look at the total picture in terms of societal obligations, then you can actually see that it's really a very sophisticated loss sharing mechanism a system that is profoundly more responsive and compassionate to the plight of poverty and difficult circumstances. In truth, this illustrates an essential proposition concerning many of the so-called hard line teachings of Judaism. Whenever you assess any particular aspect of Judaism, you have to look at the parts as part of an integrated whole and not just isolate the single straits, taken out of context. In Judaism, as in life, let us beware of unfounded generalizations based on incomplete information. May our recognition of the vast riches of our Torah spur all of us to greater commitment to learning and observance.