Is Bankruptcy Scriptural?
My father declared personal bankruptcy when I was a child. However, I grew to respect my parents even more when I learned how they handled themselves through this difficult time.
Many Christians feel guilty, or have been made to feel guilty by others over filing for bankruptcy protection. They feel guilty because the perception is that they ran up large debts on their credit cards and now are unable to pay back the money to their creditors. The truth is most personal bankruptcy is due to job loss, or uninsured medical expenses beyond their ability to control. And, many believe the Bible condemns bankruptcy. It’s important for us to define what is meant by the term “bankruptcy”; then, we can critically examine what the Bible tells us.
Wisely, those who governed us, many years ago, viewed the “debtors prison” ideas as clearly unchristian. So instead, under U.S. law, a debtor may receive a discharge of debts in a Chapter 7 bankruptcy once every eight (8) years. The Bible, likewise, contains debt forgiveness laws. Under Biblical law, the release of debts came at the end of seven (7) years.
“At the end of every seven years you shall grant a release of debts. And this is the form of the release: Every creditor who has lent anything to his neighbor shall release it; he shall not require it of his neighbor or his brother, because it is called the LORD’s release” Deuteronomy 15:1-2
Justice says that if you agree to borrow money and repay the debt, you must pay it back. But, the law of mercy allows those who cannot pay debt, to obtain forgiveness for their obligations through bankruptcy.
Another guiding principle of U.S. bankruptcy law is one that requires persons who file for bankruptcy to have “clean hands.” Accordingly, a debtor may not be freed from debts involving fraud, drunk driving, and deliberate wrongdoing. Moreover, bankruptcy law does not allow the discharge of child support and alimony debts. Further, most student loans, taxes (Romans 13:1, 4, 7) and secured loans are not forgiven in bankruptcy. Through these restrictions, bankruptcy laws seek to balance justice and mercy (Proverbs 1:3).
I believe the biblical wisdom would permit bankruptcy for the following reasons:
Many Christians feel guilty, or have been made to feel guilty by others over filing for bankruptcy protection. They feel guilty because the perception is that they ran up large debts on their credit cards and now are unable to pay back the money to their creditors. The truth is most personal bankruptcy is due to job loss, or uninsured medical expenses beyond their ability to control. And, many believe the Bible condemns bankruptcy. It’s important for us to define what is meant by the term “bankruptcy”; then, we can critically examine what the Bible tells us.
Wisely, those who governed us, many years ago, viewed the “debtors prison” ideas as clearly unchristian. So instead, under U.S. law, a debtor may receive a discharge of debts in a Chapter 7 bankruptcy once every eight (8) years. The Bible, likewise, contains debt forgiveness laws. Under Biblical law, the release of debts came at the end of seven (7) years.
“At the end of every seven years you shall grant a release of debts. And this is the form of the release: Every creditor who has lent anything to his neighbor shall release it; he shall not require it of his neighbor or his brother, because it is called the LORD’s release” Deuteronomy 15:1-2
Justice says that if you agree to borrow money and repay the debt, you must pay it back. But, the law of mercy allows those who cannot pay debt, to obtain forgiveness for their obligations through bankruptcy.
Another guiding principle of U.S. bankruptcy law is one that requires persons who file for bankruptcy to have “clean hands.” Accordingly, a debtor may not be freed from debts involving fraud, drunk driving, and deliberate wrongdoing. Moreover, bankruptcy law does not allow the discharge of child support and alimony debts. Further, most student loans, taxes (Romans 13:1, 4, 7) and secured loans are not forgiven in bankruptcy. Through these restrictions, bankruptcy laws seek to balance justice and mercy (Proverbs 1:3).
I believe the biblical wisdom would permit bankruptcy for the following reasons:
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