Is Bankruptcy Morally Acceptable--what Does God Think
Posted: Saturday, January 03, 2009
by Teresa Ortiz
Freelance writer/Speaker
Bankruptcy petitions are climbing at an all time high due to the current economic situation. Some people are using this as an easy way out. It is viewed as an excuse to start anew, but in reality, with a little sacrifice in lifestyle, this can be avoided and is not an ethical solution.
But what if you have sacrificed all luxuries--you sold the house, you sold the boat, you turned off your cable, and you have forgotten what eating out is like-what do you do?
It's possible you have thought about bankruptcy when the phone calls and letters overwhelm you, but you think to yourself, "That is unethical and just plain wrong". Over the years, I have heard many people cast judgment on those who file for debt forgiveness. It always bothered me because those who judged harshly did not know the circumstances that led to that decision--and now, for the first time, you might understand a little bit better. You may even feel sorry for thinking that way. If you are at the end of all options and you continue to spiral downward, you may want to make an appointment with a bankruptcy attorney and get a free consultation.
As good citizen with high morals and or religious values, you are having a difficult time with this decision. Yet at the same time, you are dealing with depression, anger, guilt, and probably bitterness--you feel trapped and hopeless. Nevertheless, there is hope and the God of love and understanding has given us examples of debt forgiveness. One in the Old Testament and one in the New Testament for starters. Some people are not aware of this, but our bankruptcy laws were actually modeled after the biblical principle of debt forgiveness found in the Old Testament, known as the year of Jubilee.
The year of Jubilee is a custom ordained and implemented by God for the Israelites. As a people, they were to buy and sell property and till the land according to the Sabbath rule: For six years, they may buy and sell property and harvest the crops. In the seventh year, they were to be at rest and not harvest the land. When seven yearly Sabbaths had past, (49 yrs) they knew the 50 th year was the year of Jubilee. (For the complete story, read Leviticus Chapter 25.)
This year of Jubilee was designed for those who had fallen poor and sold themselves as slaves to those who had work for them to do and food for them to eat (Much like today's employer/employee relationship). In many cases, they sold their homes as well and had to live with their masters. These people would serve for seven Sabbaths and then in the 50 th year, the masters were to let them go back to their homes and they no longer had to serve. They were truly free, as their master was not to sell the home, but rather, give it back to their servant. The very word Jubilee means freedom.
In the New Testament, we have the parable of the unmerciful servant. In context, this story is about forgiveness of sin, but Jesus used it because the people of his day were well acquainted with debt-forgiveness:
"Therefore, the Kingdom of Heaven can be compared to kings who decided to bring his accounts up to date with servants who had borrowed money from him. In the process of time, one of his debtors was brought in who owed him millions of dollars. He couldn't pay, so his master ordered that he be sold-along with his wife, his children, and everything he owned-to pay the debt. But the man fell down before his master and begged him, please, be patient with me, and I will pay it all.' Then his master was filled with pity for him, and he released him and forgave his debt." Matthew 18:23-26. (NLT)
Again, in context, Jesus is speaking of God's forgiveness of sin--explaining that when we receive forgiveness, we better be extending it to others as well. Hence, the parable of the unmerciful servant. (For the complete story, read Matt 18:21-35.) I love how Jesus always used real situations of the day so that the hearers would be able to relate to the Gospel message.
After examining these two stories--and there are more, we can conclude that it is morally acceptable to file for a chapter seven bankruptcy if all other options have failed you. Yes, it will remain on your credit report for 10 years, but at this point, your credit report is already tarnished. It will take time to get back on your feet, and you shouldn't be thinking about credit cards and new vehicles, so it is okay.
Actually, if your bankruptcy filing is due to medical expenses and loss of employment, creditors are likely to extend a legitimate need for a loan--such as a vehicle or home. But you must be aware of the vipers out there who will gladly give you a loan 3-months after you file. They are more than happy to rob the anxious buyer by charging 30% interest or more.
Let's face it, there are times we all need forgiveness-even debt forgiveness to get a fresh start. Even if you find yourself over extended in debt because of frivolous spending, it is never too late to learn from your mistakes and do it better next time around.
Lastly, if you make a decision to file for complete relief through chapter seven, you can always go back one creditor at a time and pay them back on your own accord when things turn around.
To find out if there is still time to avoid bankruptcy, I invite you to read a previous article on dealing with your creditors before bill collector's deal with you, by clicking here.
Teresa Ortiz - all rights reserved
But what if you have sacrificed all luxuries--you sold the house, you sold the boat, you turned off your cable, and you have forgotten what eating out is like-what do you do?
As good citizen with high morals and or religious values, you are having a difficult time with this decision. Yet at the same time, you are dealing with depression, anger, guilt, and probably bitterness--you feel trapped and hopeless. Nevertheless, there is hope and the God of love and understanding has given us examples of debt forgiveness. One in the Old Testament and one in the New Testament for starters. Some people are not aware of this, but our bankruptcy laws were actually modeled after the biblical principle of debt forgiveness found in the Old Testament, known as the year of Jubilee.
The year of Jubilee is a custom ordained and implemented by God for the Israelites. As a people, they were to buy and sell property and till the land according to the Sabbath rule: For six years, they may buy and sell property and harvest the crops. In the seventh year, they were to be at rest and not harvest the land. When seven yearly Sabbaths had past, (49 yrs) they knew the 50 th year was the year of Jubilee. (For the complete story, read Leviticus Chapter 25.)
This year of Jubilee was designed for those who had fallen poor and sold themselves as slaves to those who had work for them to do and food for them to eat (Much like today's employer/employee relationship). In many cases, they sold their homes as well and had to live with their masters. These people would serve for seven Sabbaths and then in the 50 th year, the masters were to let them go back to their homes and they no longer had to serve. They were truly free, as their master was not to sell the home, but rather, give it back to their servant. The very word Jubilee means freedom.
In the New Testament, we have the parable of the unmerciful servant. In context, this story is about forgiveness of sin, but Jesus used it because the people of his day were well acquainted with debt-forgiveness:
"Therefore, the Kingdom of Heaven can be compared to kings who decided to bring his accounts up to date with servants who had borrowed money from him. In the process of time, one of his debtors was brought in who owed him millions of dollars. He couldn't pay, so his master ordered that he be sold-along with his wife, his children, and everything he owned-to pay the debt. But the man fell down before his master and begged him, please, be patient with me, and I will pay it all.' Then his master was filled with pity for him, and he released him and forgave his debt." Matthew 18:23-26. (NLT)
Again, in context, Jesus is speaking of God's forgiveness of sin--explaining that when we receive forgiveness, we better be extending it to others as well. Hence, the parable of the unmerciful servant. (For the complete story, read Matt 18:21-35.) I love how Jesus always used real situations of the day so that the hearers would be able to relate to the Gospel message.
After examining these two stories--and there are more, we can conclude that it is morally acceptable to file for a chapter seven bankruptcy if all other options have failed you. Yes, it will remain on your credit report for 10 years, but at this point, your credit report is already tarnished. It will take time to get back on your feet, and you shouldn't be thinking about credit cards and new vehicles, so it is okay.
Actually, if your bankruptcy filing is due to medical expenses and loss of employment, creditors are likely to extend a legitimate need for a loan--such as a vehicle or home. But you must be aware of the vipers out there who will gladly give you a loan 3-months after you file. They are more than happy to rob the anxious buyer by charging 30% interest or more.
Let's face it, there are times we all need forgiveness-even debt forgiveness to get a fresh start. Even if you find yourself over extended in debt because of frivolous spending, it is never too late to learn from your mistakes and do it better next time around.
Lastly, if you make a decision to file for complete relief through chapter seven, you can always go back one creditor at a time and pay them back on your own accord when things turn around.
To find out if there is still time to avoid bankruptcy, I invite you to read a previous article on dealing with your creditors before bill collector's deal with you, by clicking here.
Teresa Ortiz - all rights reserved
This Article has been viewed 2,449 times. (Not updated in real-time.)
More commentsWe all need a clean slate from time to time. Thank you for a very inspirational piece.You got that right--in more ways than this, I am glad for grace. I appreciate your input.
Hi Teresa;Thank you for the great encouragement. Sometimes the overwhelming feeling of hospital bills, over priced prescriptions, and still having to maintain mortgage payments can be just too much. But, praise God for His mercy enduring forever, and His grace being sufficient even when we have to seek such things as bankruptcy.Repenting and learning the lesson is definitely the most valuable part.Keep writing. :-)DeborahHi Deborah,Thanks for commenting.So true! His grace is sufficient in all things that pertain to life.I appreciate the support! You keep writing too!
Hi Teresa! Great article. Thank you so much for giving us the biblical wisdom to understand life's issue more clearly. As always I really enjoy reading what you have to share with us from a biblical standpoint.Have a blessed 2009!Angie :-)Hi Angie,I appreciate the kind words! I love how the Bible has a solution for everything life throws at us. Whether self-inflicted or out of our control. God is good.Blessings to you in 2009 as well. May God bless your ministry too!
hi t,were you waiting for me? :)so far, we haven't had to go that route, but i am being sued for a credit card that i had in good standing for 20 years, and when the one who made the money left, he didn't pay off any debt. left with no money, i have had to deal with creditors calling, and now, i'll be back in court over this credit card debt, which was accumulated mostly by a withdrawal i had to make to get a lawyer. those are the ones i truly believe are the prolongers of bills being paid. i still haven't got my share of the 401k funds that will pay these bills, and it's been over 2 weeks since the finalization of the divorce.should be interesting.thanks for a good article.my best to you,sueHi Sue, It's about time :-)I am praying the funds come in so you can put all that behind you!Lord bless you!t
Teresa, Wonderful article, truly wonderful! Everything is in the Bible. Whatever your problem, seek and you will find. Many thanks.Amen Nancy, couldn't have said it better myself. Thank you for your input. It is much appreciated. God Bless! Teresa
Great article, Teresa. Although the Bible tells us that 'glutten' and 'envy' are sins, we are lucky to have a loving and forgiving God. We are only human and as such, we all have human weaknesses--we see something that we just have to have (we'll worry about paying for it later--the neighbors have one, so why shouldn't we. But being forced into bankruptcy isn't always something we bring upon ourselves. I grew up in a poor family that could afford nothing--sometimes, not even food. Bankruptcy was something that I had never heard of when I was young--possibly it didn't exist that far back. At any rate, we just lost what we bought and couldn't pay for--cars, furniture, etc. That taught me the lesson very young never to buy what I couldn't pay for. So fresh out of high school I got my first job (about 75 cents an hour) rented my first apartment and bought my very first--very tiny--color tv on credit. I paid for it before I bought the next item--a stand for the tv--and so on and so on. As it would happen, later years in life, I married a man who was allergic to work. He eventually lost his job and for six months I tried to make the house payment, car payment, utilities and son on and so on. Then I couldn't make it any more and was forced to file bankruptcy. That was many years ago; I have since remarried a wonderful man who worked every day plus overtime, helped with all the bills and retired leaving us completely out of debt. Good things do happen sometimes.Thanks for reminding us.SandraHi Sandra, thank you for sharing your story. I love your gentle spirit--allergic to work? Very nicely put :-)God is gracious and he knows our hearts. And yes, good things do happen.There are those out there who purposely live for bankruptcy so they can start all over and do the same thing.But some are honest, hardworking people who run into a bad situation.Thanks again.
Very excellent and informative article. There are many folks that do not feel any responsibility toward their finances and feel that bankruptcy will alleviate all their problems.Best to you and your family, Teresa!Hi Thomas, Welcome to searchwarp. Thank you for reading and commenting.You are so right but the truth is bankruptcy may relieve debt, but it doesn't alleviate problems, those still have to be worked through and it makes it difficult to get low interest rate loans for a very long time. Next I will be writing about how to clean up a credit report.I appreciate your input. All God's best to and yours! Teresa
Teresa,Good write. Especially this: "...with a little sacrifice in lifestyle, this can be avoided and is not an ethical solution..."*Fabulous!Hi Ronae, Thanks for reading and commenting. I did want to make that point clear.Lord bless you!
Hi, Teresa! Thanks for your article. I need some Biblical advice on what to do regarding whether my husband and I should file bankruptcy. I am torn. I want to pay my debt, but my husband has been in and out of work for 6 years. He was laid off twice, but in the five years that we have been married, he has worked collectively less than two years. One of your commentors stated that her husband was allergic to work. I believe that my husband is also. I am also an enabler which has contributed to the situation. At this point, my income no longer can meet the financial needs of our home. My husband's unemployment is sporadic and not sufficient. Not sure when he will start working consistently. The majority of the debts that we owe are to a creditor, who nows employs me (due to a company acquistion). So I am also facing the possibility of losing my jof if I cannot pay the debt to this creditor. (We also have debt to other creditors.) We have retained a bankruptcy attorney but I really do not want to file. I have considered borrowing from my 401K to settle some of this debt, which is a large amount. But then this does not seem like a viable solution b/c the repayment of my 401K loan will be through payroll deduction, which will reduce my bring home pay (which is already not enough to cover our basic needs). I have an at home direct sales business that is not bringing in much money and in fact I am too tired and sickly at times to really work it to bring in extra money. So I feel really stuck between a rock and a hard place. Unfortunately, I cannot really depend on my spouse to bring in extra income. I am hoping and praying for a change with that, but I cannot guarantee when it will happen and in the meantime I need to be able to keep a roof over my head, food on the table, electricity on and my car running so that I can go to work and myself healthy. What should I do? Please provide me with scriptures from God's Word to assist me. Teresa, I honestly do not know what to do. And of course, all of this has put a strain on my marriage too. Physically, speaking I am burned out and my body is breaking down from having to carry so much of the burden of providing for my family by myself. Thank you!Sincerely,Lisa SHello Lisa,First off, I want to say that I will be praying for your sitation. There are no easy answers, but there are some Biblical solutions. It's difficult to give you advice without more specific info as to what your husband does while he is not working and if he is a believer or not. Or what you mean by you are an enabler. Not that you should share those specifics here, but you are welcome to email me and I would love to counsel you more privately regarding this sitation. However, what I can say here, is that chapter 13 may be a better option for you. This way, you do pay your creditors back, with a court ordered amount based on your income. This will prevent the ability to use credit cards and you will be forced to live on cash only. I encourage you to speak with your bankruptcy lawyer about this option. My husband went through a stint of depression after surgery many years ago which led to a downward spiral in his attitude and our marriage. I was doing all that you are doing now and taking care of him too - by allowing him to get away with his spending habits even though he was not working. One of the things I was forced to do (as a result of prayer and counsel from my pastor), was remove my husband from our checking acct. Talk about anger from him. However, I stood my ground and told him that if I was going to be the one earning the income without his help in anyway, then I was the one who got to decide how the money was spent, because I had to also care for the children. I had to trust God, I had to release my husband to God's care and I no longer made it easy for my husband to stay in the condition he was in. It even came to the point where we almost separated. When I was willing to walk away and raise our kids on our own, and I left my husband alone, then God worked. There is more to it, obviously, but the main reason I share this, is because you need to answer to your Lord and be accountable to Him with the responsiblity of being head of house, since your husband has forced you into that position. This is not God's plan, nor his will for wives, but it is what you have to work with for now. As hard as it may be, the first thing you must do is to quit making it easy for your husband. This is the only thing that will motivate him to change his ways. Pray for him to stand up and be the man God created him to be, and then stay out of God's way as he works. Secondly, you need to surround yourself with strong Christian sisters who can pray with you and hold you for the hard times that are sure to follow. And thirdly, you need to counsel with your Pastor.If you deal with the spiritual issues surrounding your husband's behavior, the rest will follow.Again, there is much more to say about this, please feel free to write to me. Through prayer and standing firm, things will change and you will be able to step back from being the leader and watch God bring your husband to that place - now I have to say that some husbands do not respond, and they end up walking away, this is a tragedy for sure, but this is where you faith in God and putting God first in your life comes in. Trusting Him for the outcome. Let's talk.In prayer,Teresa
I need some advice. I have a family member that has retired for years. Medication cost are extremely expensive. We cut cost to go to a reduced cost pharmacy. We do not have luxuries. We do have cable and that is our only social outlet and entertainment. My family member can not go out of the house much do to medical problems. I have lost my job. My job outlook is dire. I had to go back to school to make myself marketble in the job market. My family member has a mortgage for it is cheaper than renting in our case. I'm living on low income while I educate myself. My income mostly goes for rent, repairs in home, utilities, and very little enjoyment in my sparetime. I do not go out with friends to a social outlet or much that requires money. I mostly go online for researching my papers at school. There is no access to college computers because of high traffic for student enrollment due to the economy, overwhelming amounts of kids using the Internet at the local library so I can not use their computers for college courses. I go bargain hunting online for clothes that are cheaper than thrift store prices. My family member does not buy much other than living necessities an example, pots and pans when needed for cooking, used car loan and insurance for grocery shopping and commute to college, car gas, our family uses one vehicle for everything and mandatory house insurance needed to live in our efficiency dwelling. We never take vacations. Government aid for healthcare doesn't help much for retired citizens reform is coming for healthcare next year. Our family has had to live on credit cards for healthcare cost. Our family could live if their was no credit card debt. We have thought about chapter 7 bankuruptcy. However, we do not want to do it because of the moral high ground. It is eventually going to get worse if we do nothing. Our family has been through at least one bakuruptcy 10 years ago due to job loss in company cut-backs. Only once we did this. We do not want to file again even know we could due to social ramifications of this problem of what people think hypothetically speaking.. Any advice on making this decision easier or making bankuruptcy an option at all?Hello David. I understand your situation and I will be praying for you and your family. It's difficult when we resort to using credit cards for living, but I know sometimes it seems the only option when we have them at our disposal. It sounds as if your income is such that you may qualify for a chapter 13. This is a good option because if approved, it stops all interest and late charges, and you pay all of your creditors back over a period of time. Depending on the plan it could be anywhere from 100% to sometimes as low as 25% for your unsecured credit. i.e. credit cards, medical bills, things of this nature. You will pay back 100% of your secured credit i.e. car and IRS if you owe back taxes. This plan runs from 3-5 years. I would recommend going this route first. IF you do not qualify for this plan because your income does not meet the requirements, then chapter 7 is your next option. You can use this as a form of temporary relief and once you finish your education and your income increases, you can go back and pay each of your creditors in full. If you do this, your moral standards will be intact. Still, if you want to try another option before talking with a bankruptcy atty, try contacting each of your creditors and see if you can reduce your payments and close the accts. You will never get ahead if you continue to use them to survive. Consider the fact that you will not have them if you file a 13 or 7 anyway, so discipline yourself and cut them up. In the end, you cannot worry about what others think, you must do what is best for your family, learn from it and move forward. Most bankruptcy atty's will give free consultations. If it were me, I would try making deals with my creditors first, if that doesn't work, then I would contact an atty. I do hope this is helpful. Again, I am praying for you. Teresa
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