The simple truth is no one expects it to happen to them, and when it does, the effect on a personal level is even harsher and more humiliating to the individual then lets say a divorce or a petty crime ever was. They don't want anyone to know, where as, a divorce or small crime is not always thought of the same way.

My response to a client after they say these things is usually along the line of talk that while you may have lost today; I didn't say you had to like it or keep thinking that way.

All debt must be listed on a bankruptcy form. However all a bankruptcy does is erase a legal obligation to pay. If you feel a moral obligation and come into new money in the future, go ahead and pay any old debt you want.

Between a friend or family member it is not a written or legal document that is needed to reflect the obligation. You know the loan happened and they know it happened, no document is needed, there is a personal bond. Clients I know of have actually done this; repaid debt previously discharged in bankruptcy. This never seems to happen with credit cards or medical bills where there is not the personal connection between debtor and creditor. Redemption or second chances, needs that personal connection.