Yes, you do have a moral obligation to pay your debts. But you may actually have HIGHER moral obligation to file bankruptcy instead.
The Moral Side of Bankruptcy
Is it the right thing to do? Is bankruptcy the morally right thing for you to do?
This is not usually talked about, maybe especially with your bankruptcy lawyer. But it’s likely looming big in your mind as you wrestle with what you should do.
The important choices in life are often moral choices. We choose between doing what’s right and doing what’s wrong.
You could just disregard that moral step. You could just decide on what at first glance seems to make the most sense, what seems to solve your immediate problems the best, or the quickest.
But then you’re more likely to have made a poor decision. Or at least an incomplete one. You’ll feel 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. Understand your past: what got you to this point of your finances?
You made a bunch of legal commitments to pay your debts. You did this when you signed the original creditor agreements and at each credit advance or credit card charge. 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 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, on the friends you don’t have time for. What financial and emotional responsibilities do you have to spouse, children, parents, siblings that just can’t handle? What other responsibilities do you have to your neighborhood, your church, and your other communities that you currently aren’t meeting? You clearly have moral obligations not just to your creditors. You have honorable and worthy obligations to all of these others, including to yourself.
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. You’re human. You’re not supposed to be or act perfectly, and most likely you have made some mistakes. Own them. But don’t beat yourself up about them or dwell on them. Focus on the future. Focus on hoping for and acting on a good future. Resolve to take the energy that it takes to make better decisions every day going forward. Don’t settle for the status quo. Don’t let yourself stay stuck. Doing nothing is a decision by default, which is almost never the right decision.
4. Get good advice: you can only make good decisions if you know your legal and practical options.
You can’t make morally good 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. For example, you can’t know whether a Chapter 13 payment plan fits your set of life obligation better than a Chapter 7 “straight bankruptcy” if you don’t know all the effects of these two options on your debts and on your other life obligations
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 you know helps YOU make a good decision. Think about what you need to do, who you need to talk with, to decide well. When you talk with a bankruptcy lawyer recognize that he or she is your legal advisor. Because your lawyer is not your moral advisor, he or she will respect that the final decisions about what to do are up to you. But your lawyer has counseled many people dealing with these kinds of decisions, so you can ask tough personal questions. Make this decision your best, well-informed, first next step into a much better future.