Bankruptcy Is a Moral Choice
Posted by Kevin on August 26, 2017 under Bankruptcy Blog | 
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Is Filing Bankruptcy a Moral Choice?
As a bankruptcy practitioner, I take for granted that filing for bankruptcy is a practical, economic choice. But for many of my clients, it is also a moral choice. They took the money or used the credit with the good faith expectation that they would pay back the creditor, and now they cannot. Does that make them a bad person? How do you reconcile this apparent disconnect?
For many of my clients with misgivings about filing, I advise to meet the issue head on. You’ll feel better (even good) about the decision only after you believe in your head and in your heart that it really is the right step to take.
How to Make a Good Moral Decision
1. What got you to this point of your finances?
You made legal commitments to pay your debts. What has changed so that you are having trouble now meeting those honest intentions to pay? What is making you seriously consider breaking those commitments permanently?
2. Understand your present: what are the costs and benefits of now trying to meet those financial commitments?
The moral benefit of not filing is that you would be keeping your promises to pay your debts. It’s easy to fixate on this and feel guilty about breaking these honest promises. But how about the real costs if you kept struggling to meet them? Consider your physical health, and your emotional health as you deal with the constant stress. Consider the debts’ effect on your marriage and family relationships. What financial and emotional responsibilities do you have to spouse, children, parents, siblings, community that you just can’t handle? You clearly have moral obligations to all these people in addition to obligations to your creditors.
3. You CAN make a good decision: you now have the opportunity to choose and act wisely.
Face your situation honestly. Don’t hide from the truth, even if it means accepting that you’ve made mistakes. Own them. But don’t beat yourself up about them. Focus on the future. Focus on what you have to do (or not do) to insure a better economic future. Not just generalizations but concrete steps. Resolve to make better economic (and other) decisions every day going forward. And then walk the walk.
4. Get good advice: you can only make good decisions if you know your legal and practical options.
You can’t make good economic or moral choices about how to attack your debts without knowing your legal alternatives for doing so. You can’t know whether the best way to deal with your creditors if you don’t know those legal options. It may turn out that credit counseling will allow you to manage your debts within your budget and without filing bankruptcy. It may turn out that a Chapter 13 payment plan fits your set of life obligation better than a Chapter 7 “straight bankruptcy”. But you cannot make those decisions unless you have the facts and options.
5. Weigh your legal options: consider effects on your creditors, yourself, your spouse, your family, and anyone else involved.
Get help from the right people and resources. Do whatever helps YOU make a good decision. Although bankruptcy attorneys are legal advisors, experienced bankruptcy attorneys have dealt with many people in their careers who have focused not only on the economic issues but the moral issues in filing bankruptcy. Discuss these concerns with your attorney. It will help you make the best, well informed decision which is the first step to a much better future.
