Questions From Readers
In these difficult economic times, more and more individuals and companies are resorting to bankruptcy. Is it Scripturally proper for a Christian to file for bankruptcy?
The answer to this question provides a fine illustration of how God’s Word offers us practical guidance on matters that may be distinctly modern. Many lands have laws regulating bankruptcy. The laws vary from country to country, and it is not for the Christian congregation to offer legal advice on this. But let us get an overview of the legal provision of bankruptcy.
One reason why governments allow individuals and businesses to declare bankruptcy is that it offers those who lend money or extend credit (creditors) a measure of protection from people or businesses that borrow money or assume debts (debtors) but do not pay what they owe. For creditors it may seem that the only recourse is to appeal to the courts to have the debtor declared bankrupt so that the debtor’s assets could then be distributed as partial payment of the debt.
Another way bankruptcy works is as a safety net for debtors who honestly cannot satisfy their creditors. The debtor may be permitted to file for bankruptcy, whereupon his creditors can take some of his assets. Still, the law may permit him to retain his home or certain minimal assets and then get on with life free of the continued threat of loss or seizure by his former creditors.
It is evident, then, that these laws are intended to offer a degree of protection to both sides in financial or business transactions. Let us, though, note what helpful counsel the Bible offers.
It would be hard for one to read the Bible from cover to cover without sensing that it does not encourage going into debt. We find such warnings as Proverbs 22:7: “The rich is the one that rules over those of little means, and the borrower is servant to the man doing the lending.”
Recall, too, Jesus’ illustration at Matthew 18:23-34 involving a slave who had a very large debt. “His master ordered him and his wife and his children and all the things he had to be sold,” but then the master, a king, relented and showed mercy. When that slave later proved unmerciful, the king ordered him ‘delivered to the jailers, until he should pay back all that was owing.’ Obviously, the best course, the recommended course, is to avoid borrowing money.
God’s servants in ancient Israel had business dealings, and sometimes borrowing and lending occurred. What did Jehovah instruct them to do? If a person wanted to borrow money to enter into or to expand a business, it was legal and normal for a Hebrew to charge interest. God urged his people, however, to be unselfish when lending to a needy Israelite; they were not to profit from an adverse situation by charging interest. (Exodus 22:25) Deuteronomy 15:7, 8 says: “In case some one of your brothers becomes poor . . . , you should generously open your hand to him and by all means lend him on pledge as much as he needs, which he is in want of.”
Similar kindness or consideration was reflected in the regulations stipulating that creditors could not seize the necessities of life from a debtor, such as the family’s grindstone or a garment needed to keep the person warm at night.—Deuteronomy 24:6, 10-13; Ezekiel 18:5-9.
Of course, not all Jews accepted and applied the spirit of these loving laws from their great Judge and Statute-giver. (Isaiah 33:22) Some greedy Jews treated their brothers very harshly. Today, too, some creditors might be harsh and unreasonable in their demands, even toward a sincere Christian who at the moment was unable to make a payment because he experienced some unforeseen occurrence. (Ecclesiastes 9:11) By their inflexible, demanding pressure, the worldly creditors might force such a debtor into a situation where he felt he had to protect himself. How? In some cases the only thing creditors will recognize is the legal step of bankruptcy. So a Christian, who was not being greedy or negligent about his debts, might resort to filing for bankruptcy.
We should be aware, though, of the other side of the matter. A Christian might be in debt because he simply did not use self-control in what or how much he spent or because he did not use reasonable foresight in his business decisions. Should he just be casual about the debt and quickly seek relief through bankruptcy, thus hurting others because of his poor judgment? The Bible does not endorse such fiscal irresponsibility. It urges the servant of God to let his yes mean yes. (Matthew 5:37) Recall, too, Jesus’ comments about counting the cost before starting to build a tower. (Luke 14:28-30) In line with that, a Christian should thoughtfully consider possible undesirable outcomes before he takes on a financial debt. Once he does assume a debt, he ought to sense his responsibility to repay individuals or companies that he owes money to. If many others perceived a Christian as irresponsible or untrustworthy, he might have sullied the good reputation that he had striven for and thus no longer have a fine testimony from outsiders.—1 Timothy 3:2, 7.
Recall what Psalm 15:4 tells us about the sort of person Jehovah welcomes. We read: “He [the one God approves] has sworn to what is bad for himself, and yet he does not alter.” Yes, God expects Christians to treat their creditors as they would want to be treated.—Matthew 7:12.
In summary, then, the Bible does not rule out the possibility that in an extreme situation, a Christian may avail himself of the protection offered by Caesar’s bankruptcy laws. However, Christians should be exceptional as to honesty and reliability. Thus, they should be exemplary in their serious desire to meet their financial obligations.