Karen,
Wow this would be a tough one! I am not one to easily forgive and I am typically pretty skeptical as well so I can totally relate.
That being said, I have dealt with similar, not the same by any means, but similar situations with my FI in the past. What I have learned and what I can deduce from your situation is, it sounds like your FI felt pretty ashamed about the money he owed to someone, asahmed enough that he didn't want to tell anyone about it. I can totally understand how upset you would be because I would imagine you feel like he lied and conceled something from you (atleast that's how I would feel). My first thought would be- if you can hide this, what else are you capable of hiding. What you should try to keep in mind is people don't always think things all the way through. If he owed someone 5K or any chunk of money it was probably the result of a poor decision in the past that he was ashamed of to begin with, by not bringing it to your attention he felt like he was protecting you from his blunder.
In my opinion he did not do this to be sneaky or hide things from you, but he did want someone who wanted to stay out of trouble and make up for their past mistakes would do. This isn't how I would go about it, nor how you probably would either, but the fact is he did. I know it can feel like a deal breaker, but try to put yourself in his shoes and understand why he did it. It sounds like to me he wanted to pay off his debt and move forward with a life with you.
I would feel devistated as well. I think the most important factor is how is he going to handle this going forward and what is he going to do to make you feel better about the situation. He made a mistake, as EVERYONE does, how will he fix/handle it.
You love him, you plan to marry him, you atleast owe him the opportunity to begin to rebuild trust with you. Punshing him over and over will only make it worse, trust me, i've done it. Give him a chance to remind you why you picked him in the first place.
I hope you can find it in your heart to give him a second chance. In my opinion he deserves it.
-Lindsey