Filing Personal Bankruptcy Answers to Christian Finance Questions

Filing personal bankruptcy is a way for the borrower to pay their debts, either in part, as in Chapter 7 bankruptcy, or over time through Chapter 13 bankruptcy. What about Christian finance? Should you as a Christian be able to declare bankruptcy? Tell us what you believe.

For some, there appears to be support within the Bible for such generous acts. For example, Deuteronomy 15:1-2 says the following:

At the end of [every] seven years thou shalt make a release. And this [is] the manner of the release: Every creditor that lendeth [ought] unto his neighbour shall release [it]; he shall not exact [it] of his neighbour, or of his brother; because it is called the LORD'S release.

These verses are talking about the year of Sabbath, which occurred every seven years, but the idea of creditors forgiving their debtors is not without merit, even in this modern day. And this law was specifically for God's people. Now do not get in a tissy and start debating theology of whether this is just for the Jews only. Either way, it is a good principle to follow. It forces both the lender and borrower to act responsibly. You have to remember that borrowing was a rarity then. Even in our country, borrowing was unheard of until the depression when the "entitlement" mentality began.

Biblical Admonitions

There is never a place in the Bible where God encourages being in debt or filing personal bankruptcy. There are, however, numerous versus warning against borrowing money and doing it responsibly. For example, in Psalms 37:21:

The wicked borroweth, and payeth not again: but the righteous sheweth mercy, and giveth.

Furthermore, in Romans 13:8, a Christian is encouraged to:

Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.

Also, in Ecclesiastes 5:4-5, the importance of a vow or promise to repay a debt is illustrated:

When thou vowest a vow unto God, defer not to pay it; for he hath no pleasure in fools: pay that which thou hast vowed. Better is it that thou shouldest not vow, than that thou shouldest vow and not pay.

Have a Plan to Repay

Based on these verses, and others found throughout the Bible, the borrower is obligated to repay his debt, in full, under the criteria of the original loan. Filing Chapter 13 bankruptcy does not mean that your debts are forgiven; it only means that the debt will be repaid over a longer period of time. For the Christian desiring to honor God, filing personal bankruptcy is not the answer to getting out debt. Having a plan and taking action is.

Today, Christians do not limit borrowing to other Christians. When we borrow and then ask Ceaser (the courts) to eliminate that debt, it becomes a black mark on our reputation. It seems easy to say, "That bank can handle it." It does, however, come at a cost to others. When you borrow $100,000 and then do not pay it back through bankruptcy, it has to come from somewhere. Have you though of that? Some business had to write off that $100,000 as a loss, reducing profit. Do this enough times and jobs are lost.

Let's reverse this a little. If you lend someone $1,000, you are going to expect them to pay it back. They come back to you and say, "Uh, sorry. No can do. I am out of money. Court says I do not have to pay." Hmmm. Yep, I can see the steam coming out of your ears and nose now.

Never borrow money without a specific plan to pay it back -- no matter the cost.

Before filing personal bankruptcy, create a written budget and seek out help. The Bible does offer instances of debt forgiveness, but it is important to realize that borrowing and paying debts in a responsible manner should be a goal of any Christian.

The next article in this Christian Finance Principles series will explore Christian giving.

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