Yes, normally everyone should pay their debts. But debt repayments should not come at the cost of basic human survival and dignity. The principle of Jubilee first expressed in the Hebrew Scriptures declares the moral conviction that debts should be forgiven before people are driven to misery and hopelessness. For Christianity, too, forgiveness is a central tenet. In addition, most societies have long recognized the prudence and justice of bankruptcy proceedings, as well as their benefit to the common good.
History demonstrates that responsibility for the debt lies with lenders as well as borrowers.
These lenders, too, must bear some of the burden of resolving the debt. Public creditors often made loans for political reasons. They received what they paid for- support in the Cold War. Furthermore, since the original loans were made, the circumstances have changed dramatically, such that, through no fault of the borrowers, the debt stock has continued to grow way beyond the original loans. This has been due to skyrocketing floating interest rates in the late 1970s, the addition to the original principal of missed payments, and new borrowing undertaken in order to keep up their debt service payments.