Bankruptcy is a topic in which there are so many differing views. The number of filings have decreased over the years. Many people will file but not really understand that it comes at a cost. The consumers pay to file bankruptcy and has to deal with the damage it does to their credit score. Financial hardship is the main cause of the many bankruptcy filings but the major factors are loss of job or medical bills. It is my goal to share with you some history about bankruptcy and how it relates to Christianity.
What is Bankruptcy?
Bankruptcy is a court proceeding where you tell a judge you can’t pay your debts. The judge and court trustee examine your assets and liabilities to decide whether to discharge those debts. If the court finds that you have no means to pay back your debt, you declare bankruptcy. Bankruptcy can stop foreclosure on your home, repossession of property, or garnishment of your wages.
Additionally, Bankruptcy doesn’t clear:
- Student loans
- Government debts like taxes, fines or penalties
- Child support and alimony
- Expensive items purchased right before filing bankruptcy like cars, boats, or jewelry
Roman Times
The Romans viewed bankruptcy as a crime. The creditor had power over the debtor. The creditor could force a debtor to sell all they had to get their money back. If after the sale the debtor still owed a balance, then a family member would be held responsible to pay. The family member who could not pay was put in jail. In today’s society the debtor has more control and can discharge their debts and not pay them back.
Medieval Times
In addition, debtors in England were placed in what is known as “Debtors Prison.” If they could not pay their bills and if they wanted to get out of prison someone else had to pay their debt.
Biblical Times (Deuteronomy 15:1-2)
At the end of every seven years you shall grant a remission of debts. This is the manner of remission: every creditor shall release what he has loaned to his neighbor; he shall not exact it of his neighbor and his brother, because the Lord’s remission has been proclaimed.
furthermore, the debtor was allowed a fresh start every 7 year. This created a society that was fair, equitable and did not permit the mistreatment of the poor. Every seventh year all lenders were to release their debtor from all their debts and no longer legally obligated to pay.
likewise, a bankruptcy discharge in biblical times has the same effect as a bankruptcy done today, therefore the biblical approach was totally different than that of the Romans. In scripture the debtor is more important. It was the forgiveness. of debt that is stressed and not the repayment.
Similarities between the biblical Law and today
Debtor can not receive a release more than once every 7 years
also the debtor is protected from any legal process to collect his debt.
Differences between the Biblical Law and today
A biblical release of debt did not require the debtor to give up his assets before being released
Today a debtor is required to give up all he has.
Christ Message
Jesus Christ died for the sins of the world. He paid the penalty for for all sin. We have to admit that we have sinned and let his death pay for our sins. Once we receive his gift of payment for our sins our sin debt is discharged (paid in full). likewise, when you file bankruptcy we publicly admit that we owe and cannot pay our debt and when the bankruptcy is done our debt is discharged and we start anew.
Finally, if you are contemplating filing bankruptcy and are in financial distress I suggest that you spend time in prayer before you make such a decision. The decision to file will come at a cost especially to your credit score. A bankruptcy will stay on your credit file for 10 years and will impact you getting future credit. If you are in debt because of the following (overspending, greed, discontentment, impatience or excessive anxiety) then bankruptcy is not the cure.
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