The Christian and Bankruptcy--by Timothy A. Southall

Should a Christian declare bankruptcy to erase his debt? First, let's look at the scriptures and see what God expects from us. The scriptures do not address bankruptcy itself, but there are some scriptures that do apply and will help us make biblical judgments and decisions.

Living on credit and not paying back is a characteristic of the wicked:

The wicked borrow and do not repay, but the righteous give generously. Psalm 37:21 (NIV)

All monetary debt must be repaid:

Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law. Romans 13:8 (NIV)

Is it biblical for a Christian in debt to get a "free ride" to his problems by signing up for bankruptcy? Based on the above verses, the answer is easy"No." A Christian must pay what he has agreed to pay and live up to the terms of his debt agreement. This may mean a change of lifestyle including where you live, what you drive, and a radical change of your spending habits. A new strict budget is a must. It is possible under certain serious circumstances, such as unexpected high medical bills, for the Christian to utilize the temporary protection of the bankruptcy court. There are types of bankruptcy which postpone repayment, rather than erase it. Court protection is extended until one has the ability to repay. This type of bankruptcy would not violate the scriptures discussed above and would be for the Christian. He must be sure not to abuse those he owes. He must take a very honest effort to take care of his financial obligations, even if it requires lengthening the time to repay, rather than just not repay it at all.

Here are some Christian principles:

  • Human law does not override God's divine law.
  • One should avoid spending without care and planning. Getting head-over-heels in debt for frivolous things, or "trying to keep up with the Jones" is not serving God as a faithful steward.
  • If someone thinks that he may simply "declare bankruptcy," and walk away from his debts, he is under a severe misunderstanding of his responsibility. God will not hold such a person blameless.
Being a good steward of money is a part of godly living and part of a Christian's witness. A Christian must keep his word. If others can't trust you to repay what you owe, why would they believe you about religion and trust in your God?

Copyright © 2004 Timothy A. Southall. All rights reserved.