Louis told the Daily Mirror newspaper: "We didn't know it was that serious. He didn't tell us much because he didn't want to drag the boys down with it."
As Westlife prepare to bow out after an almost 15 year career, Louis revealed Shane is hoping to start rebuilding his life after they play their final concert in Dublin's Croke Park tomorrow.
He said: "Last night Shane told me, 'All I want to do is just get on with it. Pick up the pieces, go out on a high with Westlife and start again.'"
Shane spent "months" working with a team of financial experts to help him get out of trouble, but he was recently ruled officially bankrupt at Kingston County Court, Surrey.
The 32-year-old star - who had to sell his Aston Martin for £322,000 - said: "Together with a team of financial and legal experts I have spent months exploring all possible alternatives to bankruptcy but to no avail.
"I have worked long and hard to try to reduce my debts, and I am devastated that it came to this conclusion.
"I now intend to focus on the remaining dates of the Westlife tour and my commitments to the band before looking to rebuild a future for my wife, my three children and myself."
Shane is dealing with his plight at his and Gillian's home in Surrey, and his bankruptcy will only last for one year in England, provided he complies with the courts, compared to 12 years in Ireland.
The singer's financial downfall came after his and his brother Finbarr's company Shafin Developments borrowed millions from Bank of Ireland and Ulster Bank during the economic boom with a view to constructing a 90-home estate in Dromahair, County Leitrim - but only 50 houses had been built when the site was recently inspected.