signing documents

Is Bankruptcy an Ethical and Moral Choice?

In simple terms, yes. Filing for bankruptcy should NOT be seen as immoral or unethical. Many debt collectors will try and "guilt" a person with debt by saying something like "you should do the right thing." But, that is a predatory tactic and not what the law allows. Here are a few reasons why filing for bankruptcy can be a positive choice.

First, you have a right to file for bankruptcy. Congress has specifically enacted bankruptcy legislation to allow individuals (and businesses) to file bankruptcy either for discharge of qualified debts or for reorganization of their debt. In the long history of humanity, there has always been some form of debt relief. Often, the historical term was a "debt jubilee" which was declared occasionally to allow debtors to escape from under their financial burdens.

Second, you have a right to the "second chance" that bankruptcies allow. As noted, Congress has passed the Bankruptcy Code setting out the requirements. Giving people a "second chance" was the purpose and intent of Congress enacting laws allowing individuals and businesses to file bankruptcy. Further, the Bankruptcy Code has various provisions -- like requiring debt counseling and disallowing discharge of certain types of debt -- that help eliminate fraud and abuse of the bankruptcy system. Most debtors are in legitimate need of financial relief. Further, filing for bankruptcy is actually addressing the financial problem, not ignoring the problem and avoiding creditors.

Third, if you read media reports, you will see that many businesses will file for bankruptcy without qualms. Indeed, it may sound strange, but many businesses see filing for bankruptcy as a business decision, to be used tactically and strategically to restructure debt and/or, maybe, to sever unprofitable parts of an otherwise sound business. The same applies to individuals. Maybe you have a vehicle that is not worth the debt you are still paying. Bankruptcy might be a solution to that problem.

Fourth, modern bankruptcy is not a "jubilee" in the sense that debt obligations are simply forgiven. If you have saleable assets and if you are seeking discharge under Chapter 7, those assets will be sold by the bankruptcy trustee to pay a portion of your debts. If you are seeking to reorganize your debt under Chapter 13, you will be required to enter into a three-to-five-year payment plan. So, again, you are not escaping your debt obligations. Rather, your obligations are modified so that you can have that "second chance" at financial freedom that the law allows.

Finally, if you are thinking about a bankruptcy, you are not alone. Over the last half decade, there have been nearly a half a million Chapter 7 bankruptcies filed per year (although the number dropped in 2020). Likewise, about a quarter million Chapter 13 bankruptcies have been filed per year (although, again, the number dropped in 2020). See US Courts report here. Adding up the annual filings, millions of people file for bankruptcy. As said, you are not alone. All of those persons benefit from their "second chance" at debt relief and an opportunity to begin a better financial future.

Contact an Experienced Debt Relief and Debtors’ Rights Attorney

For more information, contact the Debtors’ Rights attorneys at Guardian Litigation Group. We can help if you think bankruptcy is the right option. We have the tools and experience you need. Our mission is to provide unparalleled legal services and support for those being crushed by their debts and harassed by their creditors. We can also help with debt settlement negotiations for an individual creditor or a group of creditors. We can be reached via our contact page or by phone at (800) 316-3133.