Should You Feel Guilty about Filing for Bankruptcy?

05 Aug Should You Feel Guilty about Filing for Bankruptcy?

As Americans grapple with an increasingly burdensome household debt-load and rising household-related expenses, I find that one of the most commonly asked questions is as follows: “Is there a morally correct way of dispensing with a burden which simply cannot be shouldered for very much longer?”  Short Answer: Bankruptcy, when used in the right context by an honest, debt burdened consumer, is a morally appropriate solution.

I greatly admire folks who ask me questions along these lines when they come to my office.  Furthermore, I find that this question is asked by nearly every person who is seriously considering a bankruptcy filing.  It boils down to the fact that those who are interested in bankruptcy invariably tend to be the most responsible members of the overly debt-laden portion of our population, and it is one of the major reasons why I continue to represent debtors in consumer bankruptcy proceedings.  

Many of those who ask this question are already familar with the fact that the American bankruptcy system has its underpinnings in Biblical jurisprudence.  Maryland Attorney Brett Weiss wrote on this topic back in January of 2007.   It amazes me to think that that our bankruptcy code (prior to BAPCPA) went so far as to translate the Biblical time period “Jubilee” into a modern bankruptcy concept determing the time period that a debtor must wait betweeen successive chapter 7 filings in order to be eligible for a bankruptcy discharge.

 I firmly believe that the conclusion we can draw from the fact that the concept of bankruptcy was derived from biblical precepts is that bankruptcy is inherently moral and sanctioned by God in certain contexts.  Of course, I would never presume to know or understand “God’s will” for your life, therefore if you are concerned about pleasing God with your life, I would certainly still recommend that you pray over such a decision and/or seek spiritual guidance. 

In addition to being comforted by understanding that bankruptcy is a concept with Biblical origins, I find that people are comforted when they are reminded that, by and large, by the time they begin seriously considering a bankruptcy filing, they already have paid back the original principle owed on their credit obligations many times over.  It is the added fees including the usurious interest which causes a payoff to seem out of reach.  Indeed, there is a strong sense among consumers that the manner in which they are treated by lenders, and by credit card companies in particular, is unjust and contractually questionable.  Recently, Harvard Law School Professor Elizabeth Warren appeared on NPR’s Fresh Air to discuss this very issue.  In addition, Congress has recently shown concern over this aspect of the consumer experience.

In conclusion, I believe that bankruptcy can be a moral choice in certain contexts.

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