Is filing bankruptcy wrong for a believer?
Bankruptcy laws vary in different countries, but, in general, those unable to pay their debts receive temporary protection through bankruptcy. While the bankrupt is dealing with his creditors, they cannot demand payments.
Some take “Owe no man anything” (Romans 13:8) to mean they can never have mortgages or use credit cards. However, doesn’t a person owe money for the electricity he uses even before he receives a bill? Perhaps a better understanding of this passage is that it addresses a failure to pay a debt in keeping with the terms to which the creditor/provider and the debtor/consumer have agreed. Therefore, Christians who use credit are responsible for timely payments as specified under contract, whether written or understood. The present economic crisis is a reminder that young couples – and all believers – need to exercise caution even though offers of credit are liberal and abundant.
Bankruptcy laws recognize that anyone using credit may fall into circumstances (eg., sickness, catastrophe, an unforeseen economic turndown) in which he needs protection from his creditors. Since such laws affect all agreements between creditors and lenders, a Christian who declares bankruptcy is not culpable merely for failing to fulfill his “contract.”
The believer’s inability to pay his debts may result from a desire to have more than he is reasonably able to afford. This is covetousness, a violation of God’s righteous standard (Exo 20:17), and, if blatant, may require the removal of the individual from assembly fellowship (1Co 5:11). Not all cases of bankruptcy reflect a materialistic outlook that springs from covetousness. Discerning this may be a difficult decision which spiritual men who guide the assembly must make in the presence of (1Ti 5:21) and on behalf of (Mat 18:18) the Lord. Each case must be weighed individually.
Therefore, declaring bankruptcy may be wrong if the believer has made “high risk” financial decisions and has otherwise indicated an excessive determination to be rich (1Ti 6:6-20).
Should the assembly be made aware of the bankruptcy filing?
Declaring bankruptcy involves public documents; a notice of the bankruptcy may even appear in the newspaper. Thus bankruptcy could endanger a good testimony in the community and cause a loss of confidence within the assembly; as such, it is an assembly matter. Because it may involve covetousness, the believer must be willing to submit to the guidance of the oversight (Heb 13: 7, 17, 24, RV mg.). Judging one’s self in a matter that affects the assembly is not wise or just. The overseers will treat this as a confidential matter unless they need to inform the assembly in cases of fraud or covetousness.
A bankrupt believer is wise to remember that “the Lord meant it for good” (Gen 50:20, ESV). Submission to the Lord and to the assembly’s guides is the only spiritual and profitable course of action. Whatever shame may be involved will not change the principle, “Humble yourselves therefore under the mighty hand of God, that He may exalt you in due time.” The Lord follows that statement with “Casting all your care upon Him; for He careth for you” (1Pe 5:6, 7).
Can a bankrupt believer still make gift offerings?
A number of Scriptural principles apply to this question. First is recognizing our indebtedness to the Lord: “Honor the Lord with thy substance” (Pro 3:9). Second is the believer’s joyousness in giving: “God loveth a cheerful giver” (2Co 9:7). Third is our responsibility in giving: “Let every one of you lay by him in store, as God hath prospered him” (1Co 16:2). But fourth is consistent relationships: if a brother has something against a believer, the Lord taught, “First be reconciled to thy brother, and then come and offer thy gift” (Mat 5:23, 24). While this deals with a brother, the principle is clear: if horizontal relationships are not right, neither are vertical relationships. Before bringing to God the worship He so rightly deserves, you must – “as much as lieth in you” (Rom 12:18) – be right with your neighbor.
Balancing all these principles, a believer can set aside some funds to honor the Lord while paying back the creditors. The obligatory tithe of ten percent of the Law does not regulate Christians, although cheerful giving (2Co 9:6-8) will exceed that. In this case, however, the bankrupt would be wise to set aside a modest amount that would not greatly limit paying what is owed to the creditors. To maintain consistency in our relationship with God and man, the bankrupt could set money aside. When he has cleared the indebtedness, he can distribute those funds as the believer sees fit.
The payment of debts is not a light matter for a Christian. Paul recognized that the full debt of Onesimus to Philemon had to be settled (Phm 18).
Should a bankrupt believer attempt to settle with his creditors?
Two options are usually available in bankruptcy. One is to reach an agreement with the creditor in which he agrees to accept a lesser amount to settle the debt. The second is to arrange a payment schedule for completely repaying the debt. A Christian who has declared bankruptcy will act legally by choosing the first option, but if he chooses the second option, he is acting not only legally but biblically. With this, a Christian may, in good conscience, be able to negotiate with his creditors to avoid exorbitant interest rates on his debt. Nonetheless, Paul links “Owe no man anything” with “Thou shalt love thy neighbor as thyself” (Rom 13:8, 9). An unpaid debt is inconsistent with love for our neighbor. Further, if we prefer to be paid all that others owe us, then we should pay all we owe others (Mat 7:12). Those who are in the kingdom of God are to express “extra mile thinking” (5:41). They will not take the shortest route to escape paying all they have borrowed, but will extend themselves, perhaps involving some degree of hardship, to display the righteous and generous character of God (see vv 45a, 48). Bankruptcy is a Christian’s last resort, not an easy way to avoid paying his debts. Before a believer declares bankruptcy, he can receive financial counsel. Agencies that consolidate debts may work out a payment plan to avoid bankruptcy.