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Can A Christian File A Bankruptcy And Not Violate Scriptural Principles?

Can A Christian File A Bankruptcy And Not Violate Scriptural Principles?

by Deacon Tom Abbott

http://midsouthdiocese.files.wordpress.com/2008/10/dcnabbott.jpgOf course, we are to do everything in our power to meet our obligations and fulfill our promises to pay, so bankruptcy should never be the first option. The Bible is full of scriptures that encourage creditors to show mercy to debtors who have fallen on hard times and who cannot repay, but are there scriptural principles which would allow a Christian actually to escape oppressive creditor collection action?

WE ARE SUPPOSED TO SUBMIT TO THE GOVERNMENT

Many scripture texts echo Heb 13:17, telling us to "Obey your leaders and submit to their authority."

* Romans 13 tells us that (v.1) the governing authorities are established by God, that the government is (v.4) "God's servant to do you good," and therefore that we are to (v.5) "submit to the authorities."

* In Titus 3:1, the Apostle Paul tells Titus to, "Remind the people to be subject to rulers and authorities ..."

* 1 Peter 2:13 says, "Submit yourselves, for the Lord's sake, to every authority instituted among men ..." whether to the king, or to governors (in the USA, that would be Congress). Note this does not require that the leaders are Christians.

WE ARE NOT ONLY REQUIRED TO OBEY LAWS THAT RESTRICT BEHAVIOR, BUT WE CAN ALSO EXERCISE CITIZENSHIP RIGHTS THAT WORK TO OUR ADVANTAGE

Here are two examples of that from the book of Acts:

* In Acts 22: 22-29, the Apostle Paul is about to be flogged as part of his interrogation, and he demands his rights as a Roman citizen. The Centurion, in fear, stops the flogging, and later tries to claim that he came to Paul's rescue.

* In Acts 25:11, Paul is convinced that he is being railroaded in a show trial, and he exercises his right to appeal his case directly to Caesar. His captors had no choice but to send him to Rome for his appeal.

* Note that Paul had no problem demanding his rights, even though those rights were granted by an idolatrous government.

GOD INTENDED THAT DEBTS WOULD LAST ONLY A LIMITED TIME

Loans were not supposed to last longer than seven years:

* Deuteronomy 15:1-2 (with my emphasis) "At the end of every seven years you must cancel debts. This is how it is to be done: Every creditor shall cancel the loan that he has made to his fellow Israelite. He shall not require payment from his fellow Israelite or brother, because the Lord's time for canceling debts has been proclaimed."

Every fifty years, the nation's financial system was supposed to be "re-set" to the beginning:

* Leviticus 25:10 "Consecrate the fiftieth year and proclaim liberty throughout the land to all its inhabitants. It shall be a jubilee for you ..."

* - The remainder of Leviticus 25 describes the liberating actions to be taken in the Year of Jubilee. These actions included freeing slaves, returning property to the original owners, and canceling all debts. Deuteronomy 15 and Leviticus 25. Subsequent American bankruptcy law was inherited from

No nation, anywhere, at any time (including Israel) ever operated strictly according to God's rules regarding debt. In America today, the typical mortgage loan is for 30 years - but 40 and 50-year repayment plans are available. If an individual makes only the minimum monthly payment on typical credit card debt, repayment takes 40, 50, 60 years and beyond (in some cases). "Interest only" loans are never paid off. Individuals with an open-ended interest only home loan will pay for the rest of their natural lives, and when children inherit the home, they can be stuck with the debt for the rest of their lives (sort of like selling children into slavery).

British Jurisprudence (law) based the British bankruptcy law on the principles found in British Jurisprudence. Though the law has changed many times since we were a colony, bankruptcy has its roots scripture.

THE "YEAR OF DEBT CANCELLATION" AND THE "YEAR OF JUBILEE" COULD BE INTERPRETED AS THE VOLUNTARY FORGIVENESS OF DEBT, BUT DOES THE BIBLE HAVE EXAMPLES OF CREDITORS BEING ORDERED TO FORGIVE DEBT?

An example is found in the Nehemiah 5:1-12. Here is a synopsis:

* Nehemiah is the civil governor.

* People come to him to appeal for his assistance. They cite circumstances such as the requirement to pay the king's taxes and the need for food during a famine as reasons why they borrowed money and mortgaged their fields and vineyards.

* After acknowledging that they borrowed the money, they state that due to circumstances beyond their control, they are unable to pay the debts (not unwilling to pay - unable to pay). The creditors' response was to seize the loan collateral (land) and to take other drastic steps to collect the debts. The people appeal for the governor's assistance to stop the extreme collection efforts.

* Nehemiah calls in the creditors. He accuses them of :

1. Usury (making unfair profit from lending) 2. Oppressing the people (with excessive debt collection efforts) 3. Weakening the nation (in the struggle against the "gentile enemies")

* Consequently, he ORDERS that the debts be forgiven and the collateral returned.

* THAT'S BANKRUPTCY

CONCLUSION

It could be argued that when the law of the land violates God's law, a Christian is required to resist (for example, the government of Nazi Germany required citizens to inform on hidden Jews as part of the plan to exterminate the Jewish race - that was rightfully disobeyed by many Christians). However, where secular law lines up with scriptural principles - or, when the Bible is silent and where secular law is not a violation of those principles (e.g. auto traffic laws) - God requires a Christian to submit.

Beyond the responsibility to obey, there are also benefits to citizenship (the Bill of Rights, for instance). As the Apostle Paul demonstrated, where those benefits do not violate scriptural principles, a Christian certainly is free to avail himself of those benefits. (For instance, there is nothing wrong with exercising the right to Freedom of Assembly - we do it every Sunday morning and would object strenuously if someone tried to interfere with that exercise.)

One of the benefits of American citizenship is the legal right to seek relief from oppressive debt collection through the bankruptcy law. Bankruptcy in America is derived from scriptural principles.

BOTTOM LINE:

When financial circumstances are dire enough to meet the strict qualifications specified by Congress in the bankruptcy law, there is scriptural precedent for seeking relief from debt collection through the intervention of the civil authorities.

It's sometimes hard to believe, but the Bible says that Congress is "God's servant to do you good." (Rom. 13:4)

AFTERTHOUGHTS:

There are two types of bankruptcy available to individuals in the USA: one detailed in Chapter 7 of the law, and one detailed in Chapter 13. It is not the purpose of this brief paper to describe the details of what is involved in bankruptcy, and this is therefore, a very limited outline of these two.

* In Chapter 7 bankruptcies, unsecured debt (like credit card debt) is simply canceled (discharged). Secured debt (for house, car, etc.) can be eligible for discharge with the surrender of the property, or items can be retained with a legally binding promise to continue to make the contract payments.

* Chapter 13 bankruptcies involve a 3 to 5 year payment plan administered by the court. For secured debt, an individual has the choice to surrender the collateral (house, car, etc.), or to keep the item and pay the creditor as part of the plan (this can stop a foreclosure or repossession and allow someone time to catch up on late payments). For unsecured debt, the individual pays what he is able to. That could be the full amount (with no interest, late fees, or other penalties), or a smaller amount.

* A "Means Test" mandated by Congress is intended to be an objective evaluation of an individual's ability to pay. It is used to determine if he is permitted to discharge all debts in a Ch. 7, or if he is required to pay something (and how much) in a Ch. 13 bankruptcy.

* In short, someone who cannot pay is released immediately; someone who can pay everything but has fallen behind on regular payments is required to pay all debts but is relieved of excessive interest, penalties and collection action; and someone who can pay some, but not all, of his debts pays what he can afford for a reasonable time and the remainder of the debt is then canceled.

* Bankruptcy doesn't stop a debtor from paying - it stops a creditor from collecting. If circumstances later improve, there is nothing stopping an individual from repaying one or all of the discharged debts if he is able and chooses to do so.

* Rather than make a decision based only on the opinions of family, friends, co-workers, pastors, hairdressers, or even this paper, an individual with debt problems should consult an experienced bankruptcy attorney to determine what legal rights and options apply to his specific circumstances.

[All biblical references are from the New International Version of the Bible.]

---The Rev'd Deacon Thomas R. Abbott is on staff at Church of the Messiah, Jacksonville, Florida and is a paralegal for the last twelve years with one of the largest bankruptcy law firms in Northeast Florida. tom@debtcrusader.com

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