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Bankruptcy and The Bible

We live in uncertain times where money and jobs are in short supply.

Many East Texans face mounting debt, foreclosure and other financial disaster. Most Americans are living paycheck to paycheck, with many one paycheck away from total financial ruin or the dreaded “B” word—bankruptcy.

To file or not to file? Lots of East Texans struggle with this decision having been brought up in a generation where you pay your bills and you don’t dodge your creditors, regardless of the circumstances. For many, this is a tortuous decision, fraught with shame, hopelessness and defeat. Years ago, one of my clients who had a family member who was a minister, brought to my attention that bankruptcy is a biblically-based concept.

It might be comforting for those in financial distress to revisit what the Bible has to say about debt.

While the underlying premise in the Old Testament is that people are expected to pay their debts (Leviticus 25:39) as a moral and legal obligation, this obligation is tempered or balanced by principles of fairness and compassion. Implicit in this “obligation” is that people should pay debts but only debts that are “just” or “fair. It is conceivable that the Bible never contemplated “Bank of the Universe” (my nickname for Bank of America) charging consumers 25-30% interest on credit card debts and that such debts are not just and should not be paid.

Also, it is worth noting that the Bible is the original authority on what Dr. Vernon McGee (author of “Thru the Bible with J. Vernon McGee,” 1981) called “God’s poverty program”, sort of an unofficial version of bankruptcy before Congress in its infinite wisdom passed the US bankruptcy laws. Ever heard of the King James version of the Lord’s Prayer, “forgive us our debts as we forgive our debtors”?

Deuteronomy 15:1 mandates a call to cancel debts regularly (“At the end of every seven years thou shalt make a release”). This biblical-based debt forgiveness plan for debtors was based upon something called the Sabbatical and Jubilee years. During Biblical times it was common for no debt to go beyond or last more than 7 years! When the seventh year came around, if there was still money outstanding or due on money that had been lent or mortgages that had been made, those debts were all to be canceled out. This debt cancellation was mandatory, not elective or discretionary with the creditor.

The secular and congressional policies now contained in our present day bankruptcy laws follow the biblical model in that the laws allow businesses and consumers to file bankruptcy (periodically, but not repeatedly) to cancel and to restructure debts, getting a “fresh start.”

The underlying themes in the Old Testament within the areas of economic justice/fairness and stability are compassionate treatment of the poor and the importance of preserving the family unit. These goals take priority over the material concerns of repayment of debt.

There you have it. You thought Congress came up with the bankruptcy laws. If you have to file bankruptcy, don’t you feel better knowing it has already been sanctioned from on high and that you should not feel bad or immoral if you’re baptized in bankruptcy?

Remember what the Bible has to say about debt forgiveness and move forward.

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