The Morality of Filing Bankruptcy

But I just don’t think it’s moral or the right thing to do.

That’s a sentence I hear a lot, and many times it’s this thought process that will keep someone who really, legitimately needs to file for bankruptcy from doing so. Individuals who decide against filing bankruptcy because of its implications with morality will only prolong the agony and embarrassment that comes from being in debt, receiving never-ending phone calls from creditors, dealing with debt collection companies, getting sued, and having their wages or bank accounts garnished. I’m here to tell you that all the pain and suffering you will endure as you feverishly try to elude creditors is unnecessary.

To the great surprise of many, bankruptcy is actually a concept introduced in the Bible. In fact, it is mentioned favorably on more than one occasion. In Deuteronomy, Chapter 15, verses 1 and 2, Moses says to the people, “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; he shall not exact it of his neighbor, his brother, because the LORD’S release has been proclaimed.” In other words, God wants us to forgive one another of all debts every seven years.   There is further evidence for this in the Book of Nehemiah, Chapter 10, verse 31 where it is said: “………every seventh year we will forego working the land and will cancel all debts.” The idea of the forgiveness of debts exists in the New Testament too. One such example lies in the Parable of the Unforgiving Servant (Matthew 18: 21-35) in which Jesus tells the story of a lord forgiving his servant of all of his debts out of the kindness of his heart.

There are of course numerous other mentions of forgiveness of debt in the Bible, but the important thing to remember is that debtors are not condemned in the Bible. Anyone contemplating bankruptcy in modern-day America should keep this in mind, and perhaps it would make them feel better about the prospect of filing for bankruptcy.

The founding fathers of the United States also had strong feelings about the forgiveness of debt.  They felt so strongly in fact, that they put the power to regulate bankruptcies in the Constitution. They recognized that occasionally people may need a fresh start in life.

Of course, none of this is to suggest that one should file bankruptcy just for bankruptcy’s sake. We all like to pay back our creditors. We all make mistakes at times.  Most of us will get in financial trouble at some point in our lives. When we do it’s nice to know that Christianity and our wise founding fathers provide a way out.

That doesn’t mean one should file bankruptcy without thinking about it, however. It’s perfectly normal to have some misgivings about filing bankruptcy.  If you didn’t, I might question your motive for doing so. As long as your motive is pure, you should rest easy that you aren’t doing anything wrong in the eyes of God.

For more information on bankruptcy, please see our bankruptcy page

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