What does the church teach as far as filing for bankruptcy?
The dictionary defines the word “bankrupt” as “person who is adjudged insolvent by a court and whose property is divided among creditors under the bankruptcy laws.” The Church doesn’t have anything to say about such a practical way of dealing with an unfortunate financial situation. Now how such a situation comes about may be the result of immoral choices. But it can also come about by sincere, moral choices that were financially unwise.
The Church does not prohibit its members from filing for bankruptcy. In fact, two American dioceses have done just that in recent days.
Fr. Vincent Serpa, O.P.