I'm not a huge proponent on smart contracts, and I agree that it's a big problem enforcing payback, but that's no worse than regular loans. At least the ownership/transfership and payback of loans could be tracked, which is a far cry from the current method of debt ownership. It's extremely common for spreadsheets full of loans to be passed from owner to owner with no real ownership trail, accounting, etc, which I find disgusting.
Often fighting these loans is as simple as asking the owner to show proof of the loans in court, at which point they often evaporate, however it can be a long winding road to get there and often people just don't show up in court, or don't know, and get judgements against them that they might not otherwise owe. If the debt status was easily verifiable, it would be better for all sides (other than the bad actors) when it ends up in court.
Often fighting these loans is as simple as asking the owner to show proof of the loans in court, at which point they often evaporate, however it can be a long winding road to get there and often people just don't show up in court, or don't know, and get judgements against them that they might not otherwise owe. If the debt status was easily verifiable, it would be better for all sides (other than the bad actors) when it ends up in court.