Bankruptcy

Bankruptcy

With the moral fabric of the United States changing at an alarming rate, creditors want debtors to still believe that it is immoral to file for bankruptcy. Not knowing the complete truth, many Americans believe that filing bankruptcy is just like stealing. Most people these days come up with moral absolutes that best benefit themselves in this narcissistic society. I believe that people try and use the Bible as a resource to make others feel guilty about filing for bankruptcy. If the creditor can guilt the debtor into paying the debt, it should be no real surprise as it’s the creditor that’s benefiting.

Recently, the numbers for the amount of credit card debt of Americans came out and it showed an increase of $18 billion for this quarter alone over last year’s numbers. Adding this conclusion to a study that was done recently, it showed the average family living in the United States is only three weeks away from filing personal bankruptcy. Although, many experts will disagree, in reality, this is probably close to the truth. There are many people in the US that are robbing Peter to pay Paul. Every month they make the minimum payment on all their credit cards using up their entire paycheck. If they have a little bit of equity left on the credit cards, they will use that to live on. Last year, the credit market freed up the tight reins on getting credit like it was back in 2008. Many of these people have taken advantage of this to find out the end is near and a bankruptcy filing is in the future.

Going back to the topic of the morality of filing bankruptcy according to the Bible, the Bible does make it clear that an individual is expected to pay their debt in most circumstances. It doesn’t say that a debtor for no reason at all can walk from their debt and start over. Where the cancellation of debt comes is in the Old Testament and Deuteronomy 15:1-2 which says:

At the end of every seven years you shall grant a release. And this is the manner of the release: every creditor shall release what he has lent to his neighbor, his brother, because the Lords release has been proclaimed.

This is one of the verses that Congress used to come up with a constitutional requirement to enact laws allowing businesses and consumers to cancel and restructure their debts. The Bible also speaks strongly about the legal right to file for bankruptcy because of biblical doctrine that prohibited people charging exorbitant amounts of interest on money loaned. The Bible further went into speaking about slavery and a person being enslaved to another individual with debt. This is found in Deuteronomy 15:12-13:

If a fellow Hebrew, a man or a woman, sells himself to you and serves you six years, in the seventh year you must let him go free. And when you release him, do not send him away empty-handed.

The United States was founded on Judeo-Christian values and the founders used the Bible for a blueprint of the Constitution and laws. Looking into what the Bible says about filing bankruptcy, it’s not about the payment or nonpayment of debts that is not in question but whether or not the debtor was culpable for the debts. Anyway it’s looked at the Bible speaks of being merciful to debtors. The Old Testament when applied to modern day bankruptcy shows the principle that debt can be canceled by filing for bankruptcy to achieve a higher purpose allowing the debtor to have another chance.