Is it Moral to File Bankruptcy?

The Obligation to Pay Our Debts

Sure, we all have a moral obligation to pay our debts. But you may well have a higher moral obligations to get relief from those debts.

Think about it this way. Consider whether to file bankruptcy as a “business decision.” Corporations make business decisions whether it’s best for the business to file bankruptcy. They sensibly decide that bankruptcy is the best way to reduce their debts so that the business can survive and hopefully thrive going forward.

And you certainly want to survive and thrive, right?

Our Moral Choices

However, you are not a corporation but a human being. So you’re a moral creature. There’s more to our lives than dollars and cents. Our important choices are often moral ones, between doing what’s right and doing what’s wrong.

If we don’t consider this moral component in the decision about filing bankruptcy, we won’t be looking at the full picture. We risk not making a good decision, one that we can really getting behind. And we would likely feel unsettled afterwards no matter which way we go.

How to Make a Good Moral Decision

1. Be honest about your earlier choices—good and bad, sensible and short-sighted, intentional and forced. Be honest about what got you where you are now. Acknowledge that you did make legal commitments to pay your debts, and think about what, if anything, you would have done differently. We can’t learn for the future if we’re not honest with ourselves about the past.
2. Be aware that you don’t just have an opportunity to make a good decision. You actually have a moral obligation to do so. To just avoid the issue out of fear instead of facing the situation honestly is itself making the decision, in an unprincipled way. That avoided decision is likely not your morally best nor practically wisest move.
3. Get advice so that you know your alternatives. Getting good legal advice may not sound like something you have a moral obligation to do, but it actually is. Why? Because you can’t make morally good choices about your legal commitments without clearly knowing the legal alternatives about each of those commitments. You cannot know whether there are more morally acceptable ways for you to deal with your creditors—such as to file a Chapter 13 payment plan instead of a “straight” Chapter 7—if you don’t know your legal options.
4. Weigh each of your legal options in light of your different obligations—to your creditors, to yourself, your spouse, your kids, and to anyone else affected. Look at both the moral costs and benefits of now trying to meet those financial commitments. A moral benefit would be keeping your promises to pay. But its weight depends on the circumstances of your promise—to take an extreme example, how strong of a promise to pay does a person make about an emergency ambulance bill when somebody called the ambulance on his behalf when he was unconscious? As for the moral costs of keeping your promise to pay, what would be the cost on your physical and emotional health, your marriage and family relationships, and whatever other responsibilities you have to your community? You have moral obligations not just to your creditors, but also to yourself and to others.

A Big Decision

This is a very personal decision, one that you need to be happy with. So get help from the right people and resources in your life. Do whatever you know helps you make a good decision—talk to your closest friend, relative, or mentor, pray about it, write in your journal, whatever works for you.

At the Law Offices of Carrie Weir, I have given legal counsel to countless people wrestling with these decisions and can help you with yours. If you are in the Dallas-Fort WorthMetroplex, I can help. I work with individuals, couples, and small businesses mostly in and near the towns of Rockwall, Heath, Greenville, Lavon, Wylie, Mesquite, Royse City, Sachse, and Rowlett. Please call me for a free and confidential consultation at 972-772-3083. Or use the contact form here. Thank you for your interest. I look forward to serving you.