Different people work with different kinds of capital. You have taken the standard Mustachian route of financial capital. But it is also pretty well established that communities without a lot of financial capital rely on social capital; their experience is that money comes and goes, and so when you have it, you share it, and when you don't, those that do will share theirs. And to each side, the other's choices look stupid -- "why are you spending your money on THAT when you have all of these other needs?" meets "I can't believe he'd turn his back on his friend like that!" This may be why you feel guilty/pressured to help him, because his willingness to share with you when you were short creates a social expectation that you will return the favor. [This mindset, btw, is also one of the reasons that many poor people stay poor -- it's not just that they don't understand the concept of saving a windfall, it's that that runs exactly opposite of the value system they have been taught.]
I do object a little to the tone of some of these responses, which seems somewhat harsh in a "reap what he sows" kind of way. Sure, you can do that. But it sounds like this is a guy who has worked all of his life -- and who was willing and able to work to pay his debts until recently -- and who was also generous with his time and money when he had it. That's not the same as someone who expects everything to be handed to him, who is trying to mooch off of the system. Yes, he made poor money decisions, but no more than a large portion of the population as a whole; there are many, many decent people who are only a paycheck away from the same situation. It's easy to say, well, tant pis, they made their bed, let them lie on it. But if they are friends who you care about, it is a natural and generous instinct to want to help.
If your friend is 50+, I would not expect him to be willing/able to change his value system at this date. Of course, that doesn't mean you have to adopt his, either, and therefore take him in and support him for the rest of his life. But take a look at your own interactions, and think of it from the perspective of "what has he given me over all these years," in terms of both financial and emotional support. And then come up with some way that suits your own value system to help pay that back -- doesn't need to be giving him a room in your house, but like Bicycle_B noted, maybe pointing him towards the available social services, offering to help him work through applications/forms for benefits, helping him review/revise his resume to be more topical, thinking of some contacts you can point him toward to help in his job search, etc.
