Should a Christian Declare Bankruptcy?

Series on Christian Bankruptcy

Should a Christian Declare Bankruptcy?: The Ideal Level

Many Christians are interested in the relationship between Christianity and bankruptcy.  The question of Christians and bankruptcy can be discussed on two levels.  I’ll call the first the “ideal level” and the second the “sin stained” level.


On the one hand, the Bible does not deal specifically with the word bankruptcy.  On the other hand, the Bible does address borrowing and the importance of vows.  A vow is simply a promise.  In our society, every dollar we borrow we sign a legal document.  That document is our written vow to repay the debt.  Here are a few of many such verses:

The wicked borrow and do not repay, but the righteous give generously. (Psalm 37:21 NIV)

When you make a vow to God, do not delay in fulfilling it. He has no pleasure in fools; fulfill your vow. It is better not to vow than to make a vow and not fulfill it. (Ecclesiastes 5:4-5 NIV)

And do not swear by your head, for you cannot make even one hair white or black. Simply let your ‘Yes’ be ‘Yes,’ and your ‘No,’ ‘No’; anything beyond this comes from the evil one. (Matthew 5:36-37 NIV)

On the theoretical level if we were to invert the question –is it good for a Christian to borrow and not repay, the obvious answer is no. Borrowing and not repaying hinders a positive Christian witness.  It hinders trust and credibility.  It violates the golden rule.  But, that does not mean these verses are the end of a discussion.  They are instead the beginning of our discussion.

Should A Christian Declare Bankruptcy: The Sin Stained Level

I believe God has always been a God who presents the ideals to humanity while recognizing the reality of our sin stained world.  Take, for example, the issue of divorce (for illustrative purposes, not to start a huge theological debate).  The Pharisees ask Jesus if it is “lawful to divorce” (Mt. 19:3).  Jesus says divorce is not lawful – on the ideal level.  You will not find Bible verses that discuss divorce as a good thing (Mt. 19:4-6).  Nevertheless, because of the hardness of peoples’ hearts, there is a certificate of divorce (Mt. 19:8).  The discussion has now moved from ideal to the sin stained level.  Not divorcing is the ideal, yet a certificate of divorce exists because God recognizes a sin stained level where the ideal is no longer possible.  In those cases, the individual must then seek the best available alternative.
The reality is that manyChristians are in positions where they simply do not have the money available to repay loans. Many Christians are in situations where they have creditors who are unwilling to work with them.  So my question, on the sin stained level, is what are they supposed to do?  They cannot make money appear.  They cannot make debt disappear. As a result, bankruptcy may be their only option.  In some cases bankruptcy might just be the next best course of action.
Notice specifically this is not a discussion of declaring bankruptcy out of convenience or because it is an ideal financial decision.  In those cases I believe it would be a violation of Biblical principles to declare bankruptcy.  This discussion, however, does apply to those who do not have an actual means to settle their debt.
If bankruptcy is necessary, it is important that Christians have boundaries in place to help lead them through the process.  In next week’s post we will discuss guidelines to consider when filing bankruptcy.

Conclusion

Often the discussion of bankruptcy is a ‘reactive’ discussion.  A person is in debt, does not have the money necessary, and is not receiving any mercy from a lender.  However, it would be better to devote our energy to discussing the question should a Christian make decisions that might put them in a place where it will be necessary for them to declare bankruptcy? The answer to this question is no.  This is a ‘proactive’ discussion where we can help people avoid getting into a place where the ideal is no longer an option for them.  Bankruptcy is not good.  People often are not blessed by the processes.  Thus, the next important question is what can Christians and churches be doing to help their members and community avoid situations of bankruptcy?