Question:
If a person experiences difficult financial times and begins to fall behind in his/her credit card payments. Is it halachally permissible to declare personal bankruptcy? Thanks
Answer:
It would be permissible to declare personal bankruptcy, although one should bear in mind the element of a possible Chillul Hashem.
The concensus of the Poskim is that personal bankruptcy does not release the debtor from his obligations to pay his debts to his creditors.
