If you have committed an elaborate fraud, got caught, and find yourself unable to pay your debts because you spent time in jail for committing fraud, then yes, you do bear responsibility for your actions, and the results.
If you intentionally racked up your credit cards buying stereos, televisions and other luxury items, knowing that you had no hope of every repaying them, then yes, you should feel some guilt.
However, based on my many years of experience, most people who file for personal bankruptcy in Canada due so because they got into financial trouble after losing their job, going through a divorce, or having medical problems that prevented them from paying their debts. No-one wants to go bankrupt, and so even when circumstances are beyond your control, many people face a moral dilemma: Should I feel guilty if I go bankrupt?
I believe that if you have explored all other options, and still need to go bankrupt, you should not spend a lot of time feeling bad about your decision.
Start by attempting to repay your debts on your own. Cut your monthly expenses, and try to increase your income to repay your debts. Perhaps getting a debt consolidation loan is another way to make your payments each month more manageable. Talk to a non-profit credit counsellor about filing a Debt Management Plan. Talk to a licensed Canadian trustee about filing a consumer proposal.
If none of these options are possible for you, and if you face the threat of bank account seizures or wage garnishment, a personal bankruptcy in Canada may be your only logical option. You should not feel guilty about dealing with your debts so you can get on with your life.
But don’t stop there. Make a promise to yourself: “I promise I will never get into too much debt again.” Resolve to watch your money carefully, and only buy things when you can pay cash. Avoid credit unless absolutely necessary, such as getting a mortgage on a house. By using personal bankruptcy in Canada as a fresh start, you can avoid feeling guilty, and truly receive a fresh start.
J. Douglas Hoyes is a chartered accountant, licensed trustee in bankruptcy, and co-founder of Hoyes, Michalos & A