Steve,
We have been discussing the question of whether it is ever justifiable for a Christian to declare bankruptcy. When the question was raised, my immediate response was that it was not proper. The scripture came to mind "owe no man anything". My understanding of this passage is not that debt is wrong but that we must pay what we owe.
Another consideration was mentioned that might be pertinent to the question. Under the law of Moses, all debt was cancelled every sabbath (7th) year. It was not a sin for a poor person to be relieved in this way. Would declaring bankruptcy be the modern equivalent?
Another possible consideration is the factoring in of non payment costs into the interest rates charged by the banks. They assume a percent of the borrowers will not repay the debt.
The situation that prompted the question involves a poor person with a large credit card debt who was contemplating bankruptcy. The credit card was used for years until income assistance was cut off unexpectantly. The person is repentant and has not used the credit cards for some time and has vowed not to do so in the future. The person is living on the edge, getting by, but is unable to pay even the minimum payments.
I would be pleased to hear any comments from any who read this.
(hey, this is another of those "where the rubber meets the road" questions!)
Yours in Christ, Homer
Christians Declaring Bankruptcy
Christians Declaring Bankruptcy
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A Berean
This can be a tough judgment call, and it depends a lot on the attitude of the person in question. In this case, it sounds like the person was trying to pay his obligations but, because of circumstances beyond his control, became unable to.
There isn't any modern equivalent to the set of Old Testament laws regarding debts. The bankruptcy laws were instituted for a similar purpose, though. IMHO, it's not wrong to take advantage of them when one is in need of doing so.
However, I would leave you with this final caution. A lot of people who get badly into debt are there for one of two related reasons:
1. They've been spending beyond their means.
2. More importantly, they don't know how to increase their income, or how to do so without the discipline to not spend all of the increase.
It's easy to say that one should put away some savings for emergency purposes (such as unexpectedly losing one's source of income, as in this case), for retirement, or for any number of other long-term goals (such as buying a house, for example). However, for people who are living on the edge, that's just not a feasible thing to do.
The true answer is to increase your income. This is something that God has been teaching me the hard way, through problems with debt, job stability, other people depending on me, etc. And if we say that there's no easy way to increase our income, that's half of the problem right there. (I've been learning that the hard way, too!)
I would recommend that your friend go ahead and file for bankruptcy, but that he make a concerted effort to get his financial house in order and increase his income as soon as possible.
Damon
There isn't any modern equivalent to the set of Old Testament laws regarding debts. The bankruptcy laws were instituted for a similar purpose, though. IMHO, it's not wrong to take advantage of them when one is in need of doing so.
However, I would leave you with this final caution. A lot of people who get badly into debt are there for one of two related reasons:
1. They've been spending beyond their means.
2. More importantly, they don't know how to increase their income, or how to do so without the discipline to not spend all of the increase.
It's easy to say that one should put away some savings for emergency purposes (such as unexpectedly losing one's source of income, as in this case), for retirement, or for any number of other long-term goals (such as buying a house, for example). However, for people who are living on the edge, that's just not a feasible thing to do.
The true answer is to increase your income. This is something that God has been teaching me the hard way, through problems with debt, job stability, other people depending on me, etc. And if we say that there's no easy way to increase our income, that's half of the problem right there. (I've been learning that the hard way, too!)
I would recommend that your friend go ahead and file for bankruptcy, but that he make a concerted effort to get his financial house in order and increase his income as soon as possible.
Damon
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Damon is correct that large debt is the result of faulty spending patterns. That discipline in spending will be necessary to learn, even if income can be increased, because bad spending habits will consume more than the available income, regardless how large the figure may be.
Therefore, this new Christian should be discipled in the areas of contentment and patience. These are the things that are lacking more than money when someone incurs debt. His repentance should take the form, first, of destroying his credit cards and cancelling all lines of credit. Some people can manage credit in a godly manner, but a person who goes deeply into unmanagable debt does not yet know how to do so. These temptations must be removed, at least until the necessary Christian character, in this realm, has been developed.
As for the debt, it must be paid, unless it is forgiven by the creditors. Seeking forgiveness seems to be biblically advisable (Proverbs 6:1-5), but, if it cannot be obtained, the debt must be paid. Even if the lenders have cushioned themselves against financial disaster, by setting their interest rates high, this is not the concern of the honest borrower, who has promised to repay both the principal and the interest. "The wicked borrows and does not repay" (Ps.37:21). To do this is to steal, which is forbidden everywhere in scripture (Ex.20:15/ Zech.5:3/ Eph.4:28/ 1 Pet.4:15).
It doesn't matter if we think that the institution that we are stealing from can easily endure the loss. Even if the burglar's victim is a billionaire, burgrary is still a sin. It isn't merely about the victim. It's about the Christian's integrity before God and man. There is no price worth the surrender of that integrity.
The man in debt should first examine his lifestyle, and see whether he can downscale the house he lives in, or the car(s) he drives. Whether he has expensive "toys" that he could sell...etc. Many Americans, addicted to the level of prosperity they have known, never consider that these actions can be taken. "Having food and raiment, we will with these things be content" (1 Tim.6:8). This may sound unrealistic, but I have found that I, having a much lower income than the average American, have been able to raise five children without debt. I give all the glory to God for this, but it would not have been possible, had I cared much about my image or standard of living. "Seek first the kingdom of God, and all [necessary] things will be added to you" (Matt.6:33).
If the Christian in debt cannot make the minimum payments due, without incurring lawsuits, it may be excusable for him to file for bankruptcy, in order to gain some breathing room. However, a man of character (i.e., a serious Christian) will not consider himself free from the obligation to pay off his creditors, even if he has become legally released through bankruptcy court. The courts cannot cancel a debt that is owed to someone else, not them, any more than the courts can dissolve marriages where no grounds for divorce exist. The Christian answers to a higher court, and must take the immoral decisions of earthly courts with several grains of salt.
If one files for bankruptcy, he should still place himself under moral obligation to pay off any debt that is owed, in regular payments, however small. I have a friend who declared bankruptcy, and then spent the next twelve years paying-off nearly half a million dollars!
Obviously, Christians need to resist the spirit of our culture, which urges us to adopt the highest standard of living that we think our means can sustain. Rather, we should live as frugally as possible, so as to give more of what we make to the concerns of God's kingdom. When one is under crushing debt, he is especially in need of humbly adopting a more modest standard of living, at least until the debt is paid. Money owed actually belongs to the creditor, not the borrower. To spend the creditors' overdue money on luxuries, without their approval, is immoral...
...IMHO :-)
Therefore, this new Christian should be discipled in the areas of contentment and patience. These are the things that are lacking more than money when someone incurs debt. His repentance should take the form, first, of destroying his credit cards and cancelling all lines of credit. Some people can manage credit in a godly manner, but a person who goes deeply into unmanagable debt does not yet know how to do so. These temptations must be removed, at least until the necessary Christian character, in this realm, has been developed.
As for the debt, it must be paid, unless it is forgiven by the creditors. Seeking forgiveness seems to be biblically advisable (Proverbs 6:1-5), but, if it cannot be obtained, the debt must be paid. Even if the lenders have cushioned themselves against financial disaster, by setting their interest rates high, this is not the concern of the honest borrower, who has promised to repay both the principal and the interest. "The wicked borrows and does not repay" (Ps.37:21). To do this is to steal, which is forbidden everywhere in scripture (Ex.20:15/ Zech.5:3/ Eph.4:28/ 1 Pet.4:15).
It doesn't matter if we think that the institution that we are stealing from can easily endure the loss. Even if the burglar's victim is a billionaire, burgrary is still a sin. It isn't merely about the victim. It's about the Christian's integrity before God and man. There is no price worth the surrender of that integrity.
The man in debt should first examine his lifestyle, and see whether he can downscale the house he lives in, or the car(s) he drives. Whether he has expensive "toys" that he could sell...etc. Many Americans, addicted to the level of prosperity they have known, never consider that these actions can be taken. "Having food and raiment, we will with these things be content" (1 Tim.6:8). This may sound unrealistic, but I have found that I, having a much lower income than the average American, have been able to raise five children without debt. I give all the glory to God for this, but it would not have been possible, had I cared much about my image or standard of living. "Seek first the kingdom of God, and all [necessary] things will be added to you" (Matt.6:33).
If the Christian in debt cannot make the minimum payments due, without incurring lawsuits, it may be excusable for him to file for bankruptcy, in order to gain some breathing room. However, a man of character (i.e., a serious Christian) will not consider himself free from the obligation to pay off his creditors, even if he has become legally released through bankruptcy court. The courts cannot cancel a debt that is owed to someone else, not them, any more than the courts can dissolve marriages where no grounds for divorce exist. The Christian answers to a higher court, and must take the immoral decisions of earthly courts with several grains of salt.
If one files for bankruptcy, he should still place himself under moral obligation to pay off any debt that is owed, in regular payments, however small. I have a friend who declared bankruptcy, and then spent the next twelve years paying-off nearly half a million dollars!
Obviously, Christians need to resist the spirit of our culture, which urges us to adopt the highest standard of living that we think our means can sustain. Rather, we should live as frugally as possible, so as to give more of what we make to the concerns of God's kingdom. When one is under crushing debt, he is especially in need of humbly adopting a more modest standard of living, at least until the debt is paid. Money owed actually belongs to the creditor, not the borrower. To spend the creditors' overdue money on luxuries, without their approval, is immoral...
...IMHO :-)
Last edited by FAST WebCrawler [Crawler] on Mon Apr 04, 2005 8:26 pm, edited 1 time in total.
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Reason:
In Jesus,
Steve
Steve
Be careful, Steve, and go back and reread what Homer wrote. This person hadn't been using their credit cards for quite a while. Apparently they hadn't been able to pay them off yet, though. That's why my impression was that this person was trying to make a change for the better, but ended up getting trapped by circumstances beyond his control. I know how that feels, as I was unemployed with a lot of debt for a while myself.Steve wrote:Therefore, this new Christian should be discipled in the areas of contentment and patience. ...Some people can manage credit in a godly manner, but this person does not yet know how to do so.
As far as the "biblical" assertion that only the wicked borrow and do not repay, why did the bible also legislate the releasing of debts every seven years? Your logic is incomplete, as it does not address this, and thus flawed.
As far as your admonition to live within one's means, it sounded to me as if this person was on a fixed income but then lost that source of income. So, what you were advising was not really appropriate to this situation.
Steve, I have to be blunt and ask you this question. Are you really answering Homer's friend's situation, or are you projecting here, based on your own personal experiences?
A further question. Remember the woman who anointed Jesus' feet with an ointment which cost eight months' wages? Wouldn't it have been better to have been "frugal" with that ointment, rather than extravagantly "wasting" it on just that one occasion? But what did Jesus say? Why did He say it?
It seems like, in addressing the debt issue in general, you've swung the pendulum too far in the direction of living within one's means, as opposed to being creative and expansive the way our Father in heaven is. IMO, we should live in balance, neither too spendthrift nor too penny-pinching.
Damon
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_Anonymous
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This is a very interesting topic. I want to understand the disscussion as much as possible, so I have a couple of questions for Damon:
Thanks,
Michelle
Why did you put the word biblical in quotations?As far as the "biblical" assertion that only the wicked borrow and do not repay...
I would be interested to know what your thoughts are on that legislation....why did the bible also legislate the releasing of debts every seven years? Your logic is incomplete, as it does not address this, and thus flawed.
What does this incident have to do with the topic?A further question. Remember the woman who anointed Jesus' feet with an ointment which cost eight months' wages? Wouldn't it have been better to have been "frugal" with that ointment, rather than extravagantly "wasting" it on just that one occasion? But what did Jesus say? Why did He say it?
Thanks,
Michelle
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Damon,
You may be right (and I may have been mistaken) in the matter of whether this person had now learned to be responsible with his credit. I have edited my original post to make the statement more generic. You may not agree with the new wording either, but I'll stand by it.
However, I cannot agree with your other objections.
You wrote:
"As far as the 'biblical' assertion that only the wicked borrow and do not repay, why did the bible also legislate the releasing of debts every seven years? Your logic is incomplete, as it does not address this, and thus flawed."
In the Old Testament, the lender knew about the upcoming year of release. It was a factor in the expectations placed upon the borrower at the time of the loan, and the creditor expected to forgive any unpaid portion of the debt in the seventh year. If modern loans have the same stipulations clearly understood by both parties, I can find no fault with such a release of the borrower. However, I know of no parallel situation in today's lending environment.
You wrote:
"As far as your admonition to live within one's means, it sounded to me as if this person was on a fixed income but then lost that source of income. So, what you were advising was not really appropriate to this situation."
I don't see how a person's living on a fixed income changes anything about his obligations to live within his means. I would think this would make this even more necessary, since he is not making enough, nor can he expect to make enough in the future, to honestly service any debts he might incur. I hope you would not advise poor people to borrow money that they have no prospect of repaying.
You wrote:
"Steve, I have to be blunt and ask you this question. Are you really answering Homer's friend's situation, or are you projecting here, based on your own personal experiences?"
I actually don't understand the question (I have no psychological training). I think I answered the question from scripture. I also mentioned my own case as an example of the realististic possibility of obeying the scripture. Is this "projecting"? What is it, exactly, that you object to about the prospect of living within your means? I confess, I have never previously heard of a mature and scripturally-oriented Christian advising against it.
You wrote:
"A further question. Remember the woman who anointed Jesus' feet with an ointment which cost eight months' wages? Wouldn't it have been better to have been 'frugal' with that ointment, rather than extravagantly "wasting" it on just that one occasion? But what did Jesus say? Why did He say it?"
She gave it all to Jesus. I am not aware that she was ignoring any unpaid debts at the time, else Jesus might have preferred for her to use the resources to pay off the debt (Matt.5:23-24). She apparently had the ointment to spare, and rather than increasing her standard of living, she gave all to honor Jesus. This strikes me as a commendable use of expedable resources. What is your point?
You may be right (and I may have been mistaken) in the matter of whether this person had now learned to be responsible with his credit. I have edited my original post to make the statement more generic. You may not agree with the new wording either, but I'll stand by it.
However, I cannot agree with your other objections.
You wrote:
"As far as the 'biblical' assertion that only the wicked borrow and do not repay, why did the bible also legislate the releasing of debts every seven years? Your logic is incomplete, as it does not address this, and thus flawed."
In the Old Testament, the lender knew about the upcoming year of release. It was a factor in the expectations placed upon the borrower at the time of the loan, and the creditor expected to forgive any unpaid portion of the debt in the seventh year. If modern loans have the same stipulations clearly understood by both parties, I can find no fault with such a release of the borrower. However, I know of no parallel situation in today's lending environment.
You wrote:
"As far as your admonition to live within one's means, it sounded to me as if this person was on a fixed income but then lost that source of income. So, what you were advising was not really appropriate to this situation."
I don't see how a person's living on a fixed income changes anything about his obligations to live within his means. I would think this would make this even more necessary, since he is not making enough, nor can he expect to make enough in the future, to honestly service any debts he might incur. I hope you would not advise poor people to borrow money that they have no prospect of repaying.
You wrote:
"Steve, I have to be blunt and ask you this question. Are you really answering Homer's friend's situation, or are you projecting here, based on your own personal experiences?"
I actually don't understand the question (I have no psychological training). I think I answered the question from scripture. I also mentioned my own case as an example of the realististic possibility of obeying the scripture. Is this "projecting"? What is it, exactly, that you object to about the prospect of living within your means? I confess, I have never previously heard of a mature and scripturally-oriented Christian advising against it.
You wrote:
"A further question. Remember the woman who anointed Jesus' feet with an ointment which cost eight months' wages? Wouldn't it have been better to have been 'frugal' with that ointment, rather than extravagantly "wasting" it on just that one occasion? But what did Jesus say? Why did He say it?"
She gave it all to Jesus. I am not aware that she was ignoring any unpaid debts at the time, else Jesus might have preferred for her to use the resources to pay off the debt (Matt.5:23-24). She apparently had the ointment to spare, and rather than increasing her standard of living, she gave all to honor Jesus. This strikes me as a commendable use of expedable resources. What is your point?
Last edited by FAST WebCrawler [Crawler] on Wed Dec 31, 1969 7:00 pm, edited 0 times in total.
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In Jesus,
Steve
Steve
Brothers and Sisters,
Thanks much for your comments. I am sorry I am constrained from divulging too many details for obvious reasons, but I can say the information I have is that the person was making payments on the debt up to the time when a form of assistance was cut off on a technicality by a governmental agency (unjustly, I my opinion). Unable to make payments on the debt, use of the credit cards ceased.
The person admits to having made unwise use of credit in the past, is regretful, but it was not used to live extravagantly; in short, the person is poor. Over the years, Christians have given considerable help.
I do not believe it necessary to divulge more detail; I prefer to gather all the ideas I can that would be applicable to the question in general and would apply in many other situations.
As mentioned, it is my inclination to believe the debt must be repaid if possible.
I would appreciate any thoughts on the following:
Jesus said "...do not refuse him who would borrow from you." Purchasing a necessity on credit can not be inherently sinful or Jesus would have us to help someone to stumble.
It is not a sin to fail to pay what you borrow if you are unable to pay. If it was, a person would sin when they had no possibility of doing otherwise.
Credit card companies act immorally. They respond to the inability of the poor to pay by increasing the interest rate enormously and adding large late penalties to the debt. The do this legally, its in the fine print, and the unpaid balance increases by leaps and bounds.
Pride and a desire for independance and privacy can cause unnecessary borrowing from an institution. A person might be unwilling to ask for personal help from individuals or their congregation which might bring some oversight/scrutiny of the person's spending. An opportunity for some Godly counsel is lost.
Thanks much for your comments. I am sorry I am constrained from divulging too many details for obvious reasons, but I can say the information I have is that the person was making payments on the debt up to the time when a form of assistance was cut off on a technicality by a governmental agency (unjustly, I my opinion). Unable to make payments on the debt, use of the credit cards ceased.
The person admits to having made unwise use of credit in the past, is regretful, but it was not used to live extravagantly; in short, the person is poor. Over the years, Christians have given considerable help.
I do not believe it necessary to divulge more detail; I prefer to gather all the ideas I can that would be applicable to the question in general and would apply in many other situations.
As mentioned, it is my inclination to believe the debt must be repaid if possible.
I would appreciate any thoughts on the following:
Jesus said "...do not refuse him who would borrow from you." Purchasing a necessity on credit can not be inherently sinful or Jesus would have us to help someone to stumble.
It is not a sin to fail to pay what you borrow if you are unable to pay. If it was, a person would sin when they had no possibility of doing otherwise.
Credit card companies act immorally. They respond to the inability of the poor to pay by increasing the interest rate enormously and adding large late penalties to the debt. The do this legally, its in the fine print, and the unpaid balance increases by leaps and bounds.
Pride and a desire for independance and privacy can cause unnecessary borrowing from an institution. A person might be unwilling to ask for personal help from individuals or their congregation which might bring some oversight/scrutiny of the person's spending. An opportunity for some Godly counsel is lost.
Last edited by Guest on Wed Dec 31, 1969 7:00 pm, edited 0 times in total.
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A Berean
Steve,
I hit "submit" before I meant to on that last post. I want to thank you for providing this forum and all the effort in responding to questions. I do not know how you do it all. I am sure our Lord will reward you.
God Bless you and your family, I'm sure they sacrifice too!
Sincerely, Homer
I hit "submit" before I meant to on that last post. I want to thank you for providing this forum and all the effort in responding to questions. I do not know how you do it all. I am sure our Lord will reward you.
God Bless you and your family, I'm sure they sacrifice too!
Sincerely, Homer
Last edited by Guest on Wed Dec 31, 1969 7:00 pm, edited 0 times in total.
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A Berean
Hi Michelle.
Regarding the woman who anointed Jesus' feet:
The point that I was making is that, for this woman, having the ointment in the first place was an extravagant luxury! And yet obviously it wasn't a sin for her to have perhaps saved up her money to buy it. And why did she use it on Jesus? Because she recognized the importance of making something special. Jesus said that she did it for His burial, so the general principle is making something special.
So in our own lives, it's not wrong to spend a lot of hard-earned money on an extravagant luxury because we desire it. But if our lives become centered around acquiring money and luxuries, then we're obviously not putting the Kingdom first. I was basically counseling Steve to be careful not to presume that to be righteous, we must constantly live within a financial square box and never be extravagant or make anything special.
Make sense?
Damon
Because while the bible does state this, it's not as clear-cut as just this one passage would seemingly indicate.Michelle wrote:Why did you put the word biblical in quotations?
See my reply to Steve, which will follow shortly.I would be interested to know what your thoughts are on that legislation.
Regarding the woman who anointed Jesus' feet:
Steve had been talking about basically living within one's means. So let's consider this. This woman had a jar of ointment which was worth eight months' wages. How had she come by such a possession? Obviously there wasn't any more where that came from, or otherwise Judas wouldn't have been angry with its "waste" (John 12:3-8 ). Right?What does this incident have to do with the topic?
The point that I was making is that, for this woman, having the ointment in the first place was an extravagant luxury! And yet obviously it wasn't a sin for her to have perhaps saved up her money to buy it. And why did she use it on Jesus? Because she recognized the importance of making something special. Jesus said that she did it for His burial, so the general principle is making something special.
So in our own lives, it's not wrong to spend a lot of hard-earned money on an extravagant luxury because we desire it. But if our lives become centered around acquiring money and luxuries, then we're obviously not putting the Kingdom first. I was basically counseling Steve to be careful not to presume that to be righteous, we must constantly live within a financial square box and never be extravagant or make anything special.
Make sense?
Damon
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I as much as said that the OT laws regarding the release of debts have no exact modern parallel. But regardless, the laws concerning bankruptcy exist for the exact same reason that the laws regarding the release of debts in the OT existed: for when people who are poor become imprisoned by debt that is too difficult to pay off or would take a very long time. Be careful about putting a burden on one of the saints of God which he was never biblically intended to bear.Steve wrote:In the Old Testament, the lender knew about the upcoming year of release. It was a factor in the expectations placed upon the borrower at the time of the loan, and the creditor expected to forgive any unpaid portion of the debt in the seventh year. If modern loans have the same stipulations clearly understood by both parties, I can find no fault with such a release of the borrower. However, I know of no parallel situation in today's lending environment.
I think Homer cleared up what he meant before with his further posts. I understood it but apparently you still didn't. This person wasn't continuing to borrow more debt, but was unable to pay off the debt which he had already incurred. Yes, he should live within his means, but his means had just unexpectedly shrunk, leaving him in an untenable financial situation. So my counsel was to file for bankruptcy, but also to seek to increase his income rather than just settling for living within his recently reduced means.Steve wrote:I don't see how a person's living on a fixed income changes anything about his obligations to live within his means. I would think this would make this even more necessary, since he is not making enough, nor can he expect to make enough in the future, to honestly service any debts he might incur. I hope you would not advise poor people to borrow money that they have no prospect of repaying.
What I meant is, you misread and misunderstood what Homer's friend's situation was in two different ways. Both times, it seemed that what you were answering had more to do with your own situation than with Homer's friend's. That's what "projection" means.Steve wrote:You wrote:
"Steve, I have to be blunt and ask you this question. Are you really answering Homer's friend's situation, or are you projecting here, based on your own personal experiences?"
I actually don't understand the question (I have no psychological training).
I'm not blaming you or accusing you, or anything. I think you were totally unaware of what was happening, and I wanted to point it out to you to help you to see how your own mind was apparently subconsciously working.
See above, in my reply to Michelle, for my answer to the last question.
Damon
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