Should a Christian File for Bankruptcy?

Article by R. Joseph Ritter, Jr. CFP® EA

Every case is different, so unfortunately there is not a one size fits all answer. There may be times when bankruptcy is appropriate. There may be times when it is not an option. And there may be times when simply developing a sound plan to work through the financial strain is the best course of action.Let’s first look at the Biblical perspective on insolvency. Believe it or not, there are several references we can examine.

In 2 Kings 4:1-7, the widow of a prophet serving with Elisha pleads for help because her husband left behind more debt than she can pay. In those days, children were regarded as property that could be sold, put up as collateral, or taken to work off a debt. Her sons were at risk for being taken by the creditors. Elisha does a little basic financial planning with her. He asks what she wants done and what she has available as resources. She has only a pot of oil. Elisha then instructed her to borrow as many vessels as she could find, and pour the one jar into all the empty vessels. Indeed, through her faith the Lord multiplied the oil, so that all the borrowed vessels were full. Elisha then instructed her to sell the oil in the borrowed vessels and use the money to satisfy her debts.

In Nehemiah 5, the scene is a little different. Because of a famine, many people amassed debt just to obtain the essentials for living, such as food and water. The creditors, who were also Jews, were exacting usury and engaging in predatory lending practices. Nehemiah pled the cause of the borrowers, called the creditors to a Biblical model of business by reducing the interest rate and crediting back usurious interest, and then asked that the creditors restore to the debtors their land, homes, vineyards, food and oil, without requiring evictions and foreclosures. Nehemiah only asked that part of their money be restored, so that the creditors were paid something.

In Matthew 18:23-35, Jesus tells a parable about the servant who could not pay his debt when the king came to collect. The king commanded that he be sold along with his wife, children, and everything he owned, so that payment could be made. When the servant begged for mercy and patience because he would eventually pay all that was due, the king forgave the debt. But then the servant went out and had arrested one who owed him a small amount of money. The king doubled back, reinstated the debt, and put him in slavery to work off the debt.

While this parable was not meant to settle the bankruptcy question, it is in line with the other passages on insolvency. What we see in each instance is direct negotiation, a request for fair treatment, and repayment of what is owed.

You have a Scriptural duty to provide for the needs you and your family have (1 Timothy 5:8). If you are insolvent, then you may not be properly providing for yourself and your family.

You are called upon to owe no one debt (Romans 13:8) and to pay the taxes and tribute we owe (Romans 13:6-7, Mark 12:14-17).

You are called upon to love your neighbor as yourself (Matthew 22:39). Neighbors are not limited only to those in close proximity to us. Jesus clearly instructed us that our neighbors are everyone with whom we come into contact. We express love by doing to others as we would have them do to us (Matthew 7:12), and the world knows we belong to the Lord by the love we show to one another (John 13:35). Is it love to fail to repay debts legally owed to a creditor? How would you feel if you were the creditor?

You are a witness of Christ in the world (Matthew 5:13). What does insolvency and failing to repay our creditors say about Christ and our Christian witness?

Based on the four points above, insolvency places you in a position in direct contradiction to Scripture. Again, before we can expect the Lord’s blessings through tithing, we must address the more serious issues in our lives.

If after developing a sound financial plan you truly do not have the means to keep up with your monthly obligations, then we can work with you to develop a plan of prayer that will trust the Lord by faith to make up the difference. This is the far better approach before running ahead of what the Lord wants to do by filing for bankruptcy.

Should you tithe while you are insolvent? It may be permissible to tithe or give offerings while insolvent, but first a careful plan must be developed to ensure you can honor the Biblical mandates of repaying your obligations, providing for your family, loving your neighbor, and honoring Christ through your witness. No one should give expecting the Lord to bless them with abundant resources to pay off their debts in one lump sum. Instead, if you have an income, the Lord has already given you the resources to make good on the Biblical mandates.

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