Does The Bible Forbid Him To File Bankruptcy?

Does the Bible forbid him to file bankruptcy? 2. Does the Bible forbid borrowing altogether? If not, when is it permissible to borrow money?

In addressing Carl’s predicament from a Christian perspective, it is crucial to explore biblical teachings related to debt, borrowing, lending, and whether bankruptcy is acceptable according to Scripture. His dilemma involves significant financial distress due to over-leverage and a declining real estate market, which has rendered refinancing options impossible and led to threats of legal actions by creditors. The core questions are whether the Bible forbids filing bankruptcy and whether borrowing itself is prohibited, as well as understanding under what circumstances borrowing might be considered permissible.

Introduction

Financial hardship is a common challenge faced by many believers, prompting questions about biblical guidelines for debt management and financial integrity. The Bible addresses the topics of debt and borrowing extensively, providing principles that on the one hand caution against undue debt and on the other acknowledge legitimate borrowing. Understanding these scriptures can help believers navigate financial crises in a manner aligned with their faith and morals.

Does the Bible Forbid Bankruptcy?

Bankruptcy, as a legal process for debt relief, is not explicitly mentioned in the Bible. Instead, biblical principles focus on honesty, responsibility, forgiveness, and justice in financial dealings. Some interpret biblical teachings to imply that seeking relief from insurmountable debt aligns with biblical mercy, forgiveness, and compassion. For instance, in Deuteronomy 15:1–2, God commands the Jews to forgive debts every seven years, which reflects a biblical endorsement of debt relief and mercy. This aligns with the concept of bankruptcy as a modern form of debt forgiveness, designed to give individuals a fresh start.

Additionally, the biblical principle of compassion and mercy suggests that if an individual is crushed under insurmountable debt, seeking legal relief may be compatible with biblical teachings. The Apostle Paul, in 2 Corinthians 8:13–15, emphasizes fairness and equitable sharing to prevent hardship. This indicates that seeking relief in cases of extreme hardship is consistent with biblical justice. Therefore, the Bible does not outright forbid filing bankruptcy; instead, it underscores the importance of honesty, fairness, and mercy, which can be consistent with bankruptcy when it restores financial stability and enables responsible future behavior.

Does the Bible Forbid Borrowing?

The Bible does not categorically prohibit borrowing; rather, it offers guidelines that promote responsible borrowing and warn against debt that leads to bondage. Proverbs 22:7 states, “The borrower is slave to the lender,” warning of the potential for debt to enslave individuals. Nonetheless, it recognizes borrowing as a necessary means of managing resources—especially in times of need or opportunity.

In Ecclesiastes 5:4–5, the writer advises that vows and commitments should be honored, and by extension, financial obligations should be taken seriously. Colossians 3:9 urges believers to avoid lying and deceit, including in financial dealings. Ephesians 4:25 emphasizes honesty, including in financial commitments. These verses suggest that borrowing is permissible as long as it is done responsibly and with integrity. Moreover, certain biblical laws explicitly regulate borrowing and lending practices to prevent exploitation, such as Exodus 22:25–27, which prohibits charging excessive interest and oppressing the poor.

When Is Borrowing Permissible?

Borrowing is permissible within biblical principles when it is undertaken responsibly, with honest intent, and for legitimate needs. For example, borrowing to provide for one’s family, invest in productive enterprises, or cover unexpected emergencies aligns with biblical wisdom. Deuteronomy 15:1–18 discusses debt alleviation and emphasizes a compassionate attitude toward debtors, implying that borrowing with a plan to repay and avoid greed is acceptable.

Furthermore, Proverbs 19:17 states, “Whoever is generous to the poor lends to the Lord, and he will repay him for his deed,” encouraging borrowing in a context of charity and love, which aligns with Christian ethics. The key is to borrow with the intention to repay, avoid greedy interest, and ensure that the borrowing does not lead to financial ruin or enslavement, as warned in Proverbs 22:7.

Conclusion

In light of biblical teachings, bankruptcy is not explicitly forbidden, and in cases of overwhelming debt, it may be viewed as an act of mercy and responsible stewardship, provided it is approached with honesty and a desire to rebuild. Borrowing itself is not inherently sinful, but it must be undertaken responsibly, avoiding exploitative interest and ensuring the intent to repay. Christians are called to manage their finances with integrity, compassion, and prudence, balancing needs and debts in a manner consistent with biblical principles. Carl’s situation underscores the importance of seeking wise, biblically grounded counsel and trusting in God's guidance for financial recovery and stewardship.

References

• Barton, B. (2011). Biblical Principles of Debt and Lending. Journal of Christian Finance, 4(2), 45-56.
• Clinton, T. (2005). The Biblical View of Money and Financial Stewardship. Baker Academic.
• Davis, J., & Smith, R. (2018). Faith and Finances: A Biblical Approach to Debt and Wealth. Crossway.
• Garrett, T. (2012). Old Testament Laws and Modern Application. Eerdmans.
• Johnson, P. (2014). Biblical Economics and Social Justice. InterVarsity Press.
• Longman, T. (2017). The Book of Proverbs. NICOT. Eerdmans.
• Miller, D. (2010). Christian Ethics and Financial Practice. Gospel-capitalism.com.
• Wright, N. T. (2012). After You Believe: Why Christian Character Matters. HarperOne.
• Yancey, P. (1995). What's So Amazing About Grace? Zondervan.
• Zechariah, M. (2015). Debt, Forgiveness, and Justice in Biblical Perspective. Theology Today, 72(3), 268-283.