Someone in our group (my husband and I are family group leaders) wants to declare bankruptcy. We don't think this is biblical. Some might argue that filing for bankruptcy is a wise implementation of Matthew 5:24-26 and Luke 16:8, but there are many other passages that seem to say the opposite, such as letting your yes be yes (Matthew 5:37) and Romans 13:8. On the other hand, even in the Old Testament debt was forgiven after 7 years. Also does it matter what kind of debt, e.g., medical bills?
Though this is probably way too complicated to handle via email, I will offer a few thoughts. While we cannot delcare outright that filing bankruptcy is wrong, I agree that, in general, this is a poor choice, as well as a bad example. Also, using the scriptures some say justify it is a stretch at best.
Who they owe the money to might affect my opinion. If it's credit card interest, that's one thing; if it's a struggling family they owe money to, that's another. If I ever had to declare bankruptcy, I would still pay back what I owed to the brothers I had borrowed from, even if it took many years.
Lastly, I think looking to Jubilee and Sabbatical law only gives us some ideas; it gives us nothing solid to work with. As in all things, pray for wisdom (James 1:5).