You Should Never Feel Ashamed About Filing for Bankruptcy!
As evidenced in the scriptures, it is neither morally nor religiously wrong to seek bankruptcy protection when it is needed. Our Lord and Savior addresses the need for debt relief among his people by including its righteousness in the Holy Bible. God knew that evil forces, devoid of compassion and hungry for profit regardless of the consequences, might try to dissuade those in dire financial straits from seeking the relief that bankruptcy provides, on the basis that it was immoral or in conflict with God’s will. The Lord knew that those evil forces would use embarrassment or moral dilemma in their dissuasions.
So to eliminate these conflicts from mankind, God declared the righteousness of filing for bankruptcy in the Books of Deuteronomy, Luke, and Nehemiah. As such, no one should ever struggle with the decision to file for bankruptcy on moral or religious grounds. Filing for bankruptcy is a practical solution, and one should only decide its appropriateness on the basis of the relief it will provide against the cost it will incur.
Reconciling Religious Faith With the Issue of Debt Relief
“At the end of every seven years you shall grant a remission of debts. “This is the manner of remission: every creditor shall release what he has loaned to his neighbor; he shall not exact it of his neighbor and his brother, because the LORD’S remission has been proclaimed.
United States bankruptcy law, which is based on principles found throughout the Bible, contemplates the forgiveness of debt and helps overburdened debtors by allowing them to make a fresh start economically. God’s law provided that the borrower/slave would keep property (a “supply from your flock”) so that the borrower/slave would not be forced to enslave themselves again just to survive. For the same reason, modern bankruptcy law allows debtors to keep certain property when they declare bankruptcy. This gives debtors a fresh start and discourages them from becoming borrower/slaves again after the bankruptcy.
“And when they had nothing with which to repay, he freely forgave them both.”
Compassion, Forgiveness and the Release of Debt
“Every seven years we will let our fields rest, and we will cancel all debts.”
Under U.S. law, a debtor may only receive a discharge of debts in a Chapter 7 bankruptcy once every eight years; under Biblical law, the release of debts came at the end of seven years.
Some people feel guilty about seeking to file for bankruptcy protection because certain creditors may not be paid what is owed to them. Others have heard that the Bible condemns or forbids bankruptcy or that it is a sin.
Our examination of the Bible shows that, when based upon real need, filing for bankruptcy is not a sin. It is often the only effective means to deliver a debtor from the slavery of overwhelming debt and to break the cycle of borrowing. Just as Jesus, by His love and mercy, gave us a new beginning and a rebirth, choosing to declare bankruptcy can provide you with a brighter outlook and a better, wiser future.
To be sure, Scripture makes it clear that people are generally expected to pay their debts and we know that most good Christians work very hard to do so. The reality of our times—with loan officers giving mortgages to those who simply couldn’t afford it and the high unemployment rate that has led to so many lay-offs, leaving millions out of work—are such that the moral and legal obligation to pay debts must be balanced by the need for compassion and forgiveness.