Much like the question of whether there is a Constitutional right to file for Bankruptcy, the question of whether the Bible mentions or supports a Bankruptcy filing is one that comes up more in lawyers’ marketing materials than in actual discussions with clients.  The analysis is just as often inaccurate, if not misleading.  However, unlike the issue of Constitutionality, which most of us do not consider on a daily basis, we are all interested in living our daily lives in a moral and ethical manner, whether that is guided by the Bible or other authority.  However, the Bible does not implicitly or explicitly mention or approve the filing of a Bankruptcy case or a Biblical stamp of approval to discharge your debts.

Interestingly, money and finances are mentioned quite often in the Bible.  Depending on interpretation and application, the Bible has at least several hundred, and as many as 2,000 verses, that apply to money and finances.   This is more than any other subject, so clearly it is an important subject.  Many people believe that the Commandment to “have no other gods before me” applies to not only other deities, but also to personal possessions and money.   Narrowing the list down a little, there are approximately 29 verses that might apply more directly to the issue of Bankruptcy.  One of the verses most often misinterpreted to sanction or approve of Bankruptcy is Deuteronomy 15:1-2, which provides:

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.

Even before considering the context, it is obvious that the plain language (of any major translation of the Bible) refers to how we are to treat others.  We are to forgive debts, as we are to love our neighbors, and honor the Ten Commandments, and so on.  Most people would agree that all of these positive traits (whether or not they follow the Bible).  This is completely different than the debtor of Deuteronomy demanding or having a legal entitlement that his debts be forgiven or that our neighbors have a right to demand that we love them.  Interestingly, the next verse states that “of a foreigner you may exact it…”    One of the most basic skills lawyers learn in law school is statutory construction, so good lawyers know the difference between what these references mean and what they do not mean.  In addition, we also understand that where a law specifically addresses an issue, it takes precedence over a more general law.  To that end, the Bible includes these specific provisions:

  • Psalm 37:21  The wicked borrows but does not pay back, but the righteous is generous and gives.  Note that this verse specifically includes both the debtor and lender.
  • Ecclesiastes 5:5 It is better that you should not vow than that you should vow and not pay.

You will not likely see these verses in the articles and blog posts that claim Bankruptcy is sanctioned in the Bible.  The Bible, Ben Franklin and Shakespeare all seems to be in agreement that it is not good to be a lender or borrower.  Unfortunately, about the only place we can find arguments that the Bible supports or sanctions a Bankruptcy filing is in lawyers’ marketing materials.  If a person is facing overwhelming debt and is considering what the Bible has to say on the subject, they probably want to consider what it actually says and means just like they want to consider what Bankruptcy laws actually say and mean, rather than misinterpretations.  After all, if you “know the truth… the truth will set you free.

Although I have seen a few debtors over twenty-plus years of practice who have made some poor choices in how they incurred debt and were not really concerned with changing their habits, they are the exception.  Virtually every client I see has a sincere, honest desire to pay back their debts.  The issue is that they typically cannot possibly pay the debt as due and hard decisions have to made based on present circumstances.  That does not make them immoral or unethical.

For more information about a Biblical financial study, Crown Financial offers many resources and Free Money Finance is an excellent Blog.