How is paying back a debt that you agreed to re-pay a donation? (Though I'd love to see the money going to starving Africans.) If he's deliberately reducing the value of an asset which the creditors have a claim against, of course it's their business. Such behaviour is outrageous, and I'm pleased to see that smileyface agrees. I guess I see a distinction between a "safety net" and an "entitlement". For example, welfare is a protection against unemployment or disability, but that doesn't mean that you have an "entitlement", for example, to choose not to work because you've done the sums and consider that you'd be personally better off on the dole than working a low-paid job. Likewise, bankruptcy should be a last resort, not a choice because it gives you an outcome that's better for you personally. Similarly, if there is a way of repaying creditors post-bankruptcy, then you should. I couldn't enjoy wealth if I knew it was built on having victimised people in the past. I know that my father has received cheques from ex-bankrupts years after they've been discharged from bankruptcy and the debt had been written off. Admittedly, he's in a small town, where reputation counts; I'm quite willing to accept that this may be highly unusual in the city. Again, they're "entitled" to full payment. They may be forced to accept less as a matter of pragmatism, but that's quite a different matter. To do the right thing? I'm amazed you could even ask such a question. I do agree that if there is no capacity of ever repaying, it's a good idea to have the protection of a bankruptcy option, so that people can re-start their lives. But it shouldn't be seen simply as a way of managing finances to produce an optimal outcome for the individual. smileyface, I do think it's crazy that the ATO won't accept a payment arrangement over more than 2 years - especially for $320K - they would almost certainly be better off accepting payment over 10 or 20 years, for example, than sending you bankrupt. I'm sorry to hear that you're in this position. I acknowledge that you are not seeking to do anything unethical, and that you probably don't share tom32's views on many of these issues. Good luck to you, and thanks for sharing with us. Please do keep us informed, because as ianvestor has said, the stigma surrounding bankruptcy means that many of us have little insight into the process. Being investors, any of us could be there one day , so it's useful to be informed.