Is Bankruptcy Moral?

                                                    Is Filing Bankruptcy Moral?

                                                           
              At least once a week, a client or prospective client asks me if filing bankruptcy is ethical, fair, or moral.  As a lawyer who helps people file bankruptcy everyday, I could never do this type of work if I felt that it was not moral.  In fact, I believe so firmly in the process, and its protections, that I am pleased to represent creditors in cases when I feel the filing debtor is NOT acting ethically, or is trying to take advantage of the bankruptcy laws.

            First, I would point out the two primary sources for the Bankruptcy Laws. It is not Georgia's State Laws, or Judges, or even Federal Laws that created this process.  Instead, we find Bankruptcy mentioned in the United States Constitution, in order to guarantee that this right, like the other constitutional rights, cannot be taken away by mere laws or aggressive creditors. The Bible itself mandates that debts are forgiven. Whatever your religion's leanings or beliefs, the fact that bankruptcy has been around since biblical times suggests a history and credibility to this process that transcends our current legislators.

            One way I explain the morality of bankruptcy is by pointing out what types of bankruptcies are NOT allowed.  Our Federal Laws define the bankruptcy process carefully and limit certain debts that are not dischargeable in an effort to keep the process fair and moral. 

       The following are not allowed:

•             Filing bankruptcy too often or repeatedly.
•             Discharging debts owed to children or to ex-spouses for support or alimony.
•             Discharging debts created by intentional or illegal acts like drunk driving or fraudulent behavior.
•             Hiding or concealing assets that should rightfully be liquidated in a bankruptcy.
•             Charging debts or taking cash advances and then immediately filing a case to erase that debt.

            These controls and limitations, and many others found in the laws, protect bankruptcy for what the Supreme Court calls the “honest but unfortunate debtor”.  In some cases, these controls and limitations would require others debtors to pay back their debts in full.  If you find yourself the unfortunate victim of too much debt, seek out help from an attorney so they can determine if bankruptcy or debt settlement is right for you.   If you find yourself trying to take advantage of the system to escape debts that you either should or can pay back, then perhaps your situation lacks the moral justification of others.

            In most cases, the moral and ethical propriety of a bankruptcy is rooted in the foundation that all people deserve a fresh start at least once when their situation demands it. If you are troubled by the thought of not paying your debts, I remind you that while bankruptcy can excuse your nonpayment, you are always welcome to pay the old debts if and when you are able to do so.  With that in mind, I feel that the honest but unfortunate debtor is also both moral, and ethical.