Many individuals find themselves in a no-win situation. They are drowning in debt and want to pay their bills but they just can’t for a number of reasons. They feel overwhelmed with guilt when they consider a bankruptcy because they are betraying the values they have been taught by their parents and grandparents. Usually they have tried for years to catch up, work out their payments with creditors or even do bill consolidations that end up costing lots of money and given them no help.
The Bible Does Not Oppose Bankruptcy
The Bible does not specifically disapprove of bankruptcy and does not consider it a sin. Instead, it calls for people to not be a slave to their debts and encourages them to be free from their debts - and allowing bankruptcy as an option to do so. Although you are encouraged to repay your debts if possible, asking for forgiveness from your obligations and debts is acceptable according to the principles of the Bible.
Why Is Bankruptcy Controversial?
Bankruptcy is controversial because it is a friction point between two important public policy clashes. On one hand all of us want to pay off our creditors and honor our obligations, yet life happens and sometimes we bite off more than we can chew. We have death, divorce, job loss, illness and poor choices. What are we going to do, kill the debtor, cut off his hand, sell him into slavery, put him in jail??
Bankruptcy is a balancing point. Bankruptcy decides who gets paid first if there is money available. Sometimes when there is no money the debt gets wiped out for the honest but unfortunate debtor. And it is ordained by GOD.
References of Financial Rules in the Bible
God once created government and God was the head of the government. He set up some financial rules that are quite different from the way we do things today. For example it was illegal for one Jew to chard another Jew interest. Leviticus 25:36-37, Deuteronomy 24:19. Long term debt was illegal Deuteronomy 15:1-11. In fact Leviticus Chapter 25 and restated in Deuteronomy Chapter 15 was a prototype of Bankruptcy Law. Between Jews first there would be no interest accruing and the borrower would only pay on the debt for up to 7 years. Once every 7 years the debt is canceled. If you got in debt three years after the cancellation you would have to repay for 4 years and so forth. the point to understand is there were many ways one could become in debt. God himself created a law for debt cancellation.