28 Jan Bankruptcy and the Bible
According to the Bible, it it moral to file for bankruptcy? Recent studies have shown that the average American family is only three weeks away from personal bankruptcy. So it is time to revisit what the Bible teaches us about debt.
The Bible makes it clear that people are generally expected to pay their just debts. Leviticus 25:39. No one will or should argue against this. However, the Bible balances the moral and legal obligation to pay your just debts with the need for compassion and the requirement–that’s right, requirement–that debts must be canceled at periodic intervals.
The basis for this statement is the sabbatical and Jubilee years. (And, of course, the secular basis arises out of the Constitutional requirement that Congress enact uniform laws allowing businesses and consumers to cancel and to restructure debt obligations and its subsequent enactment of the Bankruptcy Code.)
This Biblical support for the legal right to cancel debt is enforced by the even stronger Biblical doctrine that prohibits interest inany amount, rather than just prohibiting usury or excessive interest. Within the areas of economic justice and stability, the Old Testament has many examples of the compassionate treatment of the poor, and with preservation of the family unit. These goals are superior to the material concerns of debt repayment. Deuteronomy 15:7-10 is particularly forceful:
If there is a poor man among your brothers . . . do not be hardhearted or tightfisted toward your poor brother. Rather be open-handed and freely lend him whatever he needs. Be careful not to harbor this wicked thought: The seventh year, the year for canceling debts, is near, so that you show ill toward your needy brother and give him nothing. He may then appeal to the LORD against you, and you will be found guilty of sin. Give generously to him and do so without a grudging heart; then because of this the LORD your God will bless you in all your work and in everything you put your hands to.
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.
The Bible on Interest
If one of your countrymen becomes poor and is unable to support himself among you, help him as you would an alien or a temporary resident, so that he can continue to live among you. Do not take interest of any kind from him, but fear your God, so that your countryman may continue to live among you. You must not lend him money at interest or sell him food at profit.
Do not charge your brother interest, whether on money or food or anything else that may earn interest.
And if you lend to those from whom you hope to receive, what credit is that to you? Even sinners lend to sinners, to receive as much again. But love your enemies and, do good, and lend, expecting nothing in return, and your reward will be great, and you will be sons of the Most High; for he is kind to the ungrateful and the selfish.
The 2005 Bankruptcy Law
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