Yes, you have a moral obligation to pay your debts. But do you have higher moral obligations to release yourself from those debts?
You could consider the choice whether or not to file bankruptcy to simply be a “business decision.” Merely a weighing of the costs and benefits of filing and not filing. This weighing would go beyond just the immediate dollars and cents by including intangible factors like the impact on your credit record. But still, in this approach your focus is on “the bottom line,” on what’s “in your best interest.”
That’s fine as far as it goes. After all, corporations of all sizes file “strategic bankruptcies” all the time. Their very smart and well-informed managers decide that bankruptcy is the best way to reduce debt and streamline their operations, so that the business can survive and hopefully thrive into the future.
And who doesn’t want to survive and thrive?
But you are more than a business. More than a corporation. For you, the human costs and benefits have to be added into the equation.
And that’s where morality comes into the decision. We humans are moral creatures. That means that our important choices are often moral choices, between doing what’s right and doing what’s wrong. To strip this away from our decision about whether or not to file bankruptcy is to dehumanize us. If we don’t engage in the moral component of this choice, we are less likely to make a good decision. And we will likely feel unsettled afterwards regardless how we decide.
So what do you need to do to make a good moral decision?
First, accept the choices that you made—good and bad, sensible and short-sighted, intentional and forced—and the circumstances that got you where you are now. Accept that you made a series of legal commitments to pay your debts, consider how much choice you had at the time about them, and in hindsight what you would have done differently, if anything. Why are you now not able to keep those commitments?
Second, consider both the moral costs and benefits of continuing to try to meet those financial commitments. The benefit would be keeping your promises to pay, which may be more or less strong of a commitment depending on the circumstances (for example, the carefully considered purchase of a home or vehicle versus incurring an emergency ambulance bill). What would be the costs in terms of 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, to your spouse, to your kids, and to society in general. Do you have a realistic chance of successfully paying off your debts, and even if so, what would be the likely human costs while doing so? And if you do not have a realistic chance, how do you weigh the benefit of putting up a good fight against the costs that come from just delaying the inevitable?
Third, recognize that you now have both the opportunity and obligation to make a good decision about whether to continue trying to meet those commitments. To just accept the status quo without facing the situation honestly and bravely is making a decision by default, which is likely neither your morally best nor practically wisest move.
Fourth, get advice so that you know your legal options. You might not think you have a moral obligation to do this, but you cannot make morally good choices about how to deal with your legal commitments without knowing your legal alternatives about each of those commitments. You cannot know whether there are more morally acceptable ways 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. When you see the legal structure within which your choices have to be made, that often helps make the moral choices much clearer.
And fifth, look at each of your legal options, and weigh them in light of your different obligations—to each of your creditors, to yourself, your spouse, your family, and anyone else affected. On one hand, this is an entirely personal decision. You need to look yourself in the mirror and be satisfied that you are doing the right thing. But as with any important decision, you can and most of the time should get help from the right people and resources. As appropriate, talk to your closest friend, your pastor, your accountant, write in your journal, or pray or meditate about it–do whatever you know helps you make a good decision. And although your bankruptcy attorney is primarily your legal advisor, and will respect that the final decisions are up to you, he or she has counseled countless people wrestling with these decisions and so will be able to help you with yours.
Henry David Thoreau said that the “price of anything is the amount of life you exchange for it.” What is “the amount of life” you are giving up until you decide that you’ve got to make a good decision and you go get the legal advice you need so that you can do so?