This is a tough question that most people who are thinking about filing bankruptcy ask themselves at one point or another. The question comes about because when you say you are going to do something, morally you should do it, so when you take out a debt and promise to repay it, the morally right thing to do is repay it. Like most things however, bills don’t exist in a vacuum, there are other factors that will play into the morality of paying bills that you can no longer afford.

There are two things I look at when judging a moral bankruptcy, were the debts made in bad faith, or good faith. If you truly believed you would be able to pay back the debts when they were made, but them something happened that affected your ability to make the same amount of money that would allow you to pay the debts, that is good faith. If you made the debts knowing that you would not be able to pay it, that is bad faith.

For instance, you lose your job and can no longer afford the monthly payments but had you kept your employment, you would still be making the payments, that is good faith. If you lose your job and decide to take one last blow out vacation because you realize you won’t be able to afford one for a long time, and hey you can just include the credit card debt in bankruptcy, well, that is bad faith.

Even if you believe you should pay debts that you made in good faith, filing bankruptcy isn’t always morally wrong. If you have credit card debt and a mortgage debt and are having financial problems, you could end up in a situation where you lose everything, but if you file bankruptcy, you could save your home and continue on to pay off that debt. Yes, the credit cards didn’t get paid, but you took care of your largest debt obligation, and made sure your family had a roof over their head. Taking care of your family is a moral obligation as well, so where do you draw the line?

Morality is often personal, and rarely black and white. The bottom line is bankruptcy can help you by relieving stress and depression, making your finances manageable, and allowing you to keep the property you need in order to live, like your car and house. While it’s easy to sit back and judge those in positions less fortunate than ourselves, none of us truly know what we would do in a situation until we are there. If you are worried about your own morality, consider all of your options, and remember that you can always repay a debt even if you have included it in a bankruptcy filing once you are in a better financial position.