Is it ever morally right to walk away from debts?

My father informed us that he is going to close the business and walk away from the debts. He has a large business, and many family breadwinners will soon be unemployed. Is this justified? He said the government has made it impossible for him to continue to earn a profit without becoming a contortionist. He said many homeowners are doing it now, and he was joining them, in a way, but with his business. I'm torn. What is your opinion?