Over the years, filing bankruptcy is carried a stigma of being immoral and dishonest. If this is true, what is the Bible say about Filing Bankruptcy? In today’s current economy, the average American family is only three weeks away from filing for bankruptcy. This sounds crazy, but when considering the amount that that Americans have and the lack of savings, people are just one small disaster away from a bankruptcy filing. What keeps people going is available credit. When you ask someone if they have a savings account, they say they don’t worry about not having savings because they have a credit card with no balance on it for emergencies. What happens if that credit disappears?
The Bible is very clear that people are expected to pay their debts. Morally, nobody will argue this point. The Bible does talk about balance between the moral and legal obligation of how someone should collect their debts in the need for compassion. With this compassion allows a creditor to cancel debts at periodic intervals. Basically this is where our bankruptcy filing system comes from. In the Old Testament there was no sabbatical in Jubilee years and compassion for the poor. In Deuteronomy it states debt should be canceled at regular intervals every seven years. And this is why Congress when they enacted the bankruptcy code allowed for a person filing Chapter 7 bankruptcy to file every seven years. That of course has changed in 2005 where now a person can only file every eight years.
The Bible also speaks strongly about how a creditor treats the poor and to not be hardhearted and tightfisted compared their brothers. Once again it speaks of being openhanded and lending freely to even the poor and if they cannot pay to grant them release from their debt every seven years. In a nutshell, if a person cannot afford to pay their debts, filing bankruptcy is okay.
