Bible and Bankruptcy: What Scripture Says
“When they had nothing with which to repay
he freely forgave them” (Luke 7:42)
Most people have no idea, or a totally wrong idea, of what the Bible teaches about bankruptcy…but the Bible is the basis of bankruptcy.
- In capitalism, the individual owns property. In communism the property is owned by the state. Scripturally, all material things are not the individual’s or the state’s, but God’s. We are stewards of His property. This is the scriptural way to look at material goods.“For every beast of the forest is mine, And the cattle upon a thousand hills. I know all the birds of the mountains; And the wild beasts of the field are mine. If I were hungry, I would not tell thee; For the world is mine, and the fullness thereof” (SA. 50:10-12). We are only stewards, or caretakers, of God’s property. We are to oversee the material goods God provides us. We are accountable. (Luke 16:2, 11-12)“It is required in stewards that a man be found faithful” (1 Corinthians 4:2).
- In fact, lending with interest in Biblical times was considered despicable.“So you ought to have deposited my money with the bankers, and at my coming I would have received back my own with interest.” (Matthew 25: 2) “If you lend money to any of my people with you who is poor, you shall not be like a moneylender to him, and you shall not exact interest from him.” (Exodus 22:25)
- Many bankruptcies happen due to accidents, health issues and job loss. These are unforeseen and unfortunate. Bankruptcy helps us back on to our feet. In a few cases it comes about due to mismanagement. Because of this, those filing bankruptcy take a financial management course to help prevent it from happening again.
- Our founding fathers thought bankruptcy was so important to the health of the country they put it in the constitution. Bankruptcy not only helps the individual, but it puts that individual back on their feet which helps the country and the economy. Huge corporations file bankruptcy. Business tycoons like Donald Trump file bankruptcy. U.S. Presidents have filed bankruptcy, President Lincoln filed TWICE.
- In the Gospels, Jesus teaches about God’s forgiveness and the requirements for people to forgive (Matthew 18:21-35 and Luke 7:36-50):“And when they had nothing with which to repay, he freely forgave them both.” (Luke 7:42)
- The Bible also talks about fraud, and condemns it, but in the same verse exhorts us to be generous:The wicked borrows but does not pay back [with intent], but the righteous is generous and gives; (Psalms 37:21) Following Scripture, you cannot discharge any debt due to fraud as well as DUI, alimony, child support, and intentional destruction of property.
- As for creditors, God blesses these acts of forgiveness and mercy (Deuteronomy 15:5, 10. and 18.)
- In the Bible, people were granted a “bankruptcy” every seven years. Until a few years ago our government followed Biblical example, but in 2005, it was changed to every eight years.“At the end of every seven years you shall grant a release of debts. And this is the form of the release: Every creditor who has lent anything to his neighbor shall release it; he shall not require it of his neighbor or his brother, because it is called the LORD’s release.” (Deuteronomy 15:1-2)
- In Scripture, debt is a form of slavery.“. . . the borrower is a slave to the lender” (Proverbs 22:7.)Once again the Bible declares freedom of the slaves every seven years. Not only is the slave free, but he is not destitute:“In the seventh year you shall let your Hebrew slave go free from you. And when you send him away free from you, you shall not let him go away empty-handed; but you shall supply him liberally from your flock…” (Deuteronomy 15:12-14)Today, you may not be getting any “sheep” when you file bankruptcy, but the same idea applies. You are able to keep some, if not all of your property. Most people who file bankruptcy do not lose ANYTHING.
- We are asked to pray“ . . . forgive us our debts (sins) as we forgive our debtors (those who sin against us).”(Matthew 6:12 and Luke 11:4)
- Bankruptcy is actually a precursor to Christ. In bankruptcy, when you have debt to large to repay, it is forgiven. Scripturally, our sin is too large to repay, so Jesus paid it for us by dieing on the cross.
- Ultimately, you must seek wisdom and guidance from God as to the direction that He would have you choose. Fortunately, God promised to give wisdom to those you ask with a trusting heart (James 1:5-7, Proverbs 3:5-6.)
- “For I know the plans I have for you says the Lord. Plans for good and not for evil.To give you a future and a hope.” (Jeremiah 29:11)