Does anyone have any moral objections to filing bankrupcy?  I'm not trying to be tough on anyone but it does seem like if we take out the loan and purchase things with it then we should at some point pay it off. 
I understand that people get into situations and I know that bankrupcy has some other disadvantages, but I was just wondering if anyone else felt that they couldn't morally file for bankrupcy?

Last edited by jenn (2007-07-11 10:37:42)

I have never had to do this.  I would have a very difficult time filing for bankruptcy if I was faced with that decision.

I've heard stories of people abusing the system or using bankruptcy as an easy way out instead of trying to honestly pay off their debt.

An unfortunately story someone told me is that when a family decided to file for bankruptcy they told their children to go out and buy whatever they wanted because the bankruptcy would cover it. Definitely an abuse of the system and "someone" has to pay for it in the end. (probably tax payers).

Personally, I think it should only be done if there is NO possible way someone could ever pay off their debt and not just used to start with a clean slate.

If bankruptcy is your fault, it *may* be an indication of a character flaw (e.g., you're supposed to be responsible for the debts you take on).

However, we don't have "debtor's prison" anymore because there are *some* cases where bankruptcy is the best chance of a positive future for everyone -- you *and* your debtors (or society at large).

IMHO, many people game the system and are too eager to enter into bankruptcy.  Some people use bankruptcy to most easily avoid obligations, even when they could otherwise fulfill their obligations.  These decisions are character flaws, and depending on the circumstance, yes, may be an indication of a moral failing.

However, I fully accept that bankruptcies can be "righteous", such as in the case to recover from major medical costs, or when recovering from some other unforeseen loss (death of spouse, unexpected loss of job, etc.)  If your family is broke because one child needed treatment for leukemia, it doesn't help society or the other three children in the house if the family can't ever buy toothpaste again.

I think these things are very situation-specific, although we can probably all agree on some of the more obvious cases at both ends of the spectrum.

Last edited by charleyb (2007-07-31 17:29:46)

I agree.  If you purchase something, anything, you should work to pay for it.  However, there are individuals who have issues which cause them problems in repaying a debt.  Those situations that are truly beyond your control, then I think bankruptcy is a viable choice.  But, there are those who purchase, purchase and purchase without ever considering the consequence.  Then when they get into a bind, they file Bankruptcy. To sum it up, I think when it comes to a situation that is beyond your control and you have no other means of resolving the issue, file Bankruptcy.

charleyb wrote:

If bankruptcy is your fault, it *may* be an indication of a character flaw (e.g., you're supposed to be responsible for the debts you take on).

However, we don't have "debtor's prison" anymore because there are *some* cases where bankruptcy is the best chance of a positive future for everyone -- you *and* your debtors (or society at large).

IMHO, many people game the system and are too eager to enter into bankruptcy.  Some people use bankruptcy to most easily avoid obligations, even when they could otherwise fulfill their obligations.  These decisions are character flaws, and depending on the circumstance, yes, may be an indication of a moral failing.

However, I fully accept that bankruptcies can be "righteous", such as in the case to recover from major medical costs, or when recovering from some other unforeseen loss (death of spouse, unexpected loss of job, etc.)  If your family is broke because one child needed treatment for leukemia, it doesn't help society or the other three children in the house if the family can't ever buy toothpaste again.

I think these things are very situation-specific, although we can probably all agree on some of the more obvious cases at both ends of the spectrum.

I hadn't thought of medical issues, that's a good point.  I agree that those types of expenses are very very different.

I think that bankruptcy exists for a good reason, but I think that there has been a TON of abuse of the system, so any moral objection would have to be on a case by case basis!

I feel that morally if one is able repayment should be made. The responsibility is there. If the debtor is willing to forgive, waive or settle the debt that is another case.

  However, morally you don't see the debtee morally walking away and not paying. usually the debtor will wipe the slate, forgive the debt or try to settle worried that no payment will be made and willing to take a settlement on the issue.

  Often dept looks bleak. I had over 100k in debt, the interest made it even more difficult to deal with. However the attorney that I met with said that I could still get myself out of debt and 2.5 years later I am closer to the goal.

   Morally I put myself in theshoes of the person who I owe the money too. If someone owed me I would want to be paid.
  It would have to be a pretty dire situation with no assets or resources to walk away from.

I would have to agree with those points.

I wouldn't look at it from a moral perspective as much as I would look at it from a fiscal perspective. when bankruptcy makes proper fiscal sense its options should be explored.