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Although the Bible does not address bankruptcy per se, we do have some principles that might apply and therefore help us make some judgments.Biblical principle #1. We have the responsibility to kee...
Most teaching on bankruptcy rightly quotes: “The wicked borrows but does not pay back” (Psalm 37:21)—End of argument. However, this isn’t the whole story: God’s Word commands complete forgiveness of all debts EVERY SEVENTH YEAR (Deut. 15:1-2). The United States Bankruptcy Laws are rightly based on these biblical principles. It was this idea of giving someone a fresh start that inspired our bankruptcy laws (Local Loan v. Hunt), which gives the unfortunate debtor a new opportunity in life to be free from the discouragement of debt. Regrettably in 2005, Congress passed the Bankruptcy Reform Act (under pressure by money-lending lobbyists), which reduced bankruptcy filings by 75%. Dr. Donald Morgan, PhD, contends that this curtailment of bankruptcy relief was the cause of the massive buildup of debt, which contributed to the present-day financial meltdown. Charging high interest rates (usury) by credit card companies (up to 28%) and payday lenders (equal to 300% APR), is morally wrong (Lev. 25:37; Exo. 22:15). The US Supreme Court came out with a ruling that lifted all restrictions against regulating interest rates. As a tax accountant, my office was once sued for copyright infringement. The name I had chosen, “The Tax Doctor,” had already been taken (without my knowledge). It scared the living daylights out of me, as it threatened to totally wipe me out financially. Fortunately, I was friends with a local judge, with whom I confided my dilemma. He reassured me that they would have to prove in court that I had damaged them. Since I resided in Arizona and operated only locally, and they were in Illinois, they would have been hard-pressed to prove that I hurt their business. They eventually dropped the case. There are times when a business is forced into bankruptcy through no choice of their own: their large debtors file bankruptcy on them, thus creating a domino effect; landlords unreasonably boost lease payments; fires or natural disasters wipe one out; banks unexpectedly refuse loans to farmers for seed-planting and cultivating—the list goes on and on of things beyond one’s control. Individuals are also forced into bankruptcy by unforeseen emergencies: huge hospital bills not covered by insurance; loss of a “secure” job; court costs and attorney fees for unfounded lawsuits against them; the filing for divorce of an estranged spouse—and so on. A Believer should pay his debts if he is able. But it’s not always possible for one who has become incapacitated (either physically or mentally) to satisfy all one’s obligations—try as he might. “They shouldn’t have gotten into debt in the first place.” True. But how many Christians pay cash for their homes or cars? (That doesn’t make it right, I know.) The most powerful scriptural advice for getting out of debt and avoiding bankruptcy is to bend over backwards in your giving to the Lord and His work: “Give, and it will be given to you. Good measure, pressed down, shaken together, running over, will be put into your lap. For with the measure you use it will be measured back to you” (Luke 6:38). "Will man rob God? Yet you are robbing Me. But you say, 'How have we robbed You?' In your tithes and contributions. You are cursed with a curse, for you are robbing Me, the whole nation of you. Bring the full tithe into the storehouse, that there may be food in My house. And thereby put Me to the test, says the LORD of hosts, if I will not open the windows of heaven for you and pour down for you a blessing until there is no more need" (Mal. 3:8-10). Tithing is an eternal principle: It's the law of seed-time and harvest (Gen. 8:22). We focus on need; God focuses on seed. To get a harvest, a seed has to sown. Taking what belongs to God brings a curse on us. To withhold your tithes and offerings is like taking money from the church offering plate. Tithing is not "under the law," (an excuse some Christians give for not tithing). Abraham tithed 480 years before the law was given. So be faithful.
Thing to remember is there will always come a day of reckoning. A good name is better than gold. Those who do not pay there debts are causing their own trouble. There are times when people through no fault of their own get themselves in to deep to get out. My parents lost everything they had at one point, and had to come live in my basement until they got on their feet again. It was hard because I was working three part time jobs, raising four teen agers, and taking care of my wife's sister who was dying of cancer. I was at the point that I would do anything to earn a dollar within the law. During those years we always paid our debts and put food on the table. But I had to depend totally on the Lord to provide. I had no other choice. Now in my old age I have money that I have stored up to take care of my wife if I should go first. And the bible says the parents are to lay up for the children and not the children for the parents. I still find money to help others in need and will continue to do that till the day I die. Giving does the heart good and it keeps us from greed which we all fight against. If we are going to love our neighbor we are going to have to give to those in need. But giving grudgingly is not giving. Give out of your heart towards God for His glory and not for your own. If you give out of legality you will loose the blessing. Legalism kills the spirit of giving. Giving to get kills the spirit. Give to those who can not pay you back and if possible do it through someone else so they do not know the money came from you. Then you will have treasure in heaven. Going in to debt keeps us from having what we need and extra to help others. Old age does bring wisdom. We all have to learn the lessons of life. Sometimes the hard way. Last of all remembering what Jesus did for us and how much He went through to save us will keep us from pride and self righteousness through giving. We could never do enough to pay our sin debt that He did for us. Knowing that my sins are gone is greater than all that I could ever do. Loving God and loving people because Jesus first loved us helps us to keep a balance. Self righteousness and pride are joy killers along with legalism.
When it comes to personal finances many Americans unfortunately are illiterate. The entire banking system is designed to confuse, mislead and misinform the average consumer. Many of us receive in the mail or online tens of unsolicited offers for all types of loans and credit cards, all accompanied by many pages of fine print in language that only a banking attorney would understand. And the result, not surprising, is that many people volunteer to financial obligations and agree to terms and conditions they do not read or understand. In many cases, sooner or later, people realize that are buried under a mountain of debt with no ability to ever repay, and bankruptcy appears to be only solution. In many cases, a change in lifestyle, a second job and downsizing could be the pathway to financial health. The Bible is very clear about how Christians should behave in matters of finances (Romans 12:2, Romans 13:7-8, Luke 14:28, Proverbs 22:7, Proverbs 21:20, Proverbs 22:3). We should resist the temptation to live above our means and take loans that we cannot repay. Having said that, in US many of the bankruptcies are not the result of careless spending, but catastrophic events. Although it is difficult the find accurate statistics, most studies show that between 55% and 75% of US bankruptcies are related to healthcare expenses. And what is even more troubling is that the majority of these individuals had some type of health insurance but the copay was too great, or the treatment was not entirely covered by the insurance. US has the most advanced medial care in the world but is the most expensive. A routine cancer treatment or uncomplicated open heart surgery can result in medical bills in hundreds of thousands of dollars that can overwhelm even the most frugal and financial conservative person if the insurance doesn't cover all or most expenses. In Deuteronomy 15:1–2 God instituted the Shemittah law and told His people to show mercy to the indebted; the loan amnesty program called Puzbul. God does not want us to be in bondage to sin or to any financial institution, He wants us free. It's up to each individual to carefully evaluate his/hers financial obligations, how do they got in that situation and then decide what is the best way to settle that debt.
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