Case Study: Bankruptcy and the Bible

Case Study: Bankruptcy and the Bible

Case Study: Your long-time friend Carl comes to you with a serious problem in his life. He is a believer, and he wants your advice. For years he and his family have lived above their means. They did this by continually refinancing their house and rolling their credit card and other debt onto their home mortgage. However, now that real estate prices are no longer rising but actually falling, Carl can’t refinance anymore and can’t pay his monthly bills as they come due. He is in a real credit crisis. His creditors are calling him threatening lawsuits, garnishments, and other unpleasant things.

One of his friends at work said that he should file bankruptcy. He comes to you for advice from a Christian perspective. In particular, he wants to know: 1. Does the Bible forbid him to file bankruptcy? 2. Does the Bible forbid borrowing altogether? If not, when is it permissible to borrow money? Use the words “Forbids” or “Does not Forbid” in the subject line of your discussion board post, depending upon your conclusion. Do not use attachments as these are cumbersome and inhibit the discussion process. Suggested Readings:

Read and consider these and other Bible verses that relate to borrowing, lending, and lawsuits: Proverbs 17:14, Proverbs 20:3, Proverbs 25:8-10, 1 Corinthians 6:1-8, Matthew 5:22-26, Matthew 5:33-37, Matthew 5:38-42, Psalm 37:21, Ecclesiastes 5:4-5, Colossians 3:9, Ephesians 4:22, Ephesians 4:25, Leviticus 25, Deuteronomy 15:1-18, Psalm 37:26, Psalm 112:5, Proverbs 19:17, Proverbs 22:7, Deuteronomy 24:6, Deuteronomy 24:10-13, Deuteronomy 24:17, Exodus 22:25-27, Proverbs 6:1-5, and Proverbs 22:26-27. You may also want to consult some good commentaries and other study aids on some of the verses that seem particularly relevant to you.

Proverbs 17:14 New International Version (NIV) 14 Starting a quarrel is like breaching a dam; so drop the matter before a dispute breaks out. 3 It is to one’s honor to avoid strife, but every fool is quick to quarrel. 8 do not bring hastily to court, for what will you do in the end if your neighbor puts you to shame? 9 If you take your neighbor to court, do not betray another’s confidence, 10 or the one who hears it may shame you and the charge against you will stand. 1 Corinthians 6:1-8 New International Version (NIV) Lawsuits Among Believers If any of you has a dispute with another, do you dare to take it before the ungodly for judgment instead of before the Lord’s people? 2 Or do you not know that the Lord’s people will judge the world? And if you are to judge the world, are you not competent to judge trivial cases? 3 Do you not know that we will judge angels? How much more the things of this life! 4 Therefore, if you have disputes about such matters, do you ask for a ruling from those whose way of life is scorned in the church? 5 I say this to shame you. Is it possible that there is nobody among you wise enough to judge a dispute between believers? But instead, one brother takes another to court—and this in front of unbelievers! 7 The very fact that you have lawsuits among you means you have been completely defeated already. Why not rather be wronged? Why not rather be cheated? 8 Instead, you yourselves cheat and do wrong, and you do this to your brothers and sisters. Matthew 5:22-26 New International Version (NIV) 22 But I tell you that anyone who is angry with a brother or sister[a][b] will be subject to judgment. Again, anyone who says to a brother or sister, ‘Raca,’[c] is answerable to the court. And anyone who says, ‘You fool! ’ will be in danger of the fire of hell. 3 “Therefore, if you are offering your gift at the altar and there remember that your brother or sister has something against you, 24 leave your gift there in front of the altar. First go and be reconciled to them; then come and offer your gift. 25 “Settle matters quickly with your adversary who is taking you to court. Do it while you are still together on the way, or your adversary may hand you over to the judge, and the judge may hand you over to the officer, and you may be thrown into prison. 26 Truly I tell you, you will not get out until you have paid the last penny. Matthew 5:33-37 New International Version (NIV) Oaths 3 “Again, you have heard that it was said to the people long ago, ‘Do not break your oath, but fulfill to the Lord the vows you have made. ’ 34 But I tell you, do not swear an oath at all: either by heaven, for it is God’s throne; 35 or by the earth, for it is his footstool; or by Jerusalem, for it is the city of the Great King. 36 And do not swear by your head, for you cannot make even one hair white or black. 37 All you need to say is simply ‘Yes’ or ‘No’; anything beyond this comes from the evil one. [a] Matthew 5:38-42 New International Version (NIV) Eye for Eye 38 “You have heard that it was said, ‘Eye for eye, and tooth for tooth. [a] 39 But I tell you, do not resist an evil person. If anyone slaps you on the right cheek, turn to them the other cheek also. 40 And if anyone wants to sue you and take your shirt, hand over your coat as well. 41 If anyone forces you to go one mile, go with them two miles. 42 Give to the one who asks you, and do not turn away from the one who wants to borrow from you. Psalm 37:21 New International Version (NIV) 21 The wicked borrow and do not repay, but the righteous give generously; Ecclesiastes 5:4-5 New International Version (NIV) 4 When you make a vow to God, do not delay to fulfill it.

He has no pleasure in fools; fulfill your vow. 5 It is better not to make a vow than to make one and not fulfill it. Colossians 3:9 New International Version (NIV) 9 Do not lie to each other, since you have taken off your old self with its practices Ephesians 4:22 New International Version (NIV) 22 You were taught, with regard to your former way of life, to put off your old self, which is being corrupted by its deceitful desires; Ephesians 4:25 New International Version (NIV) 25 Therefore each of you must put off falsehood and speak truthfully to your neighbor, for we are all members of one body.

Leviticus 25 New International Version (NIV) The Sabbath Year 25 The LORD said to Moses at Mount Sinai, 2 “Speak to the Israelites and say to them: ‘When you enter the land I am going to give you, the land itself must observe a sabbath to the LORD. 3 For six years sow your fields, and for six years prune your vineyards and gather their crops. 4 But in the seventh year the land is to have a year of sabbath rest, a sabbath to the LORD. Do not sow your fields or prune your vineyards. 5 Do not reap what grows of itself or harvest the grapes of your untended vines. The land is to have a year of rest. Whatever the land yields during the sabbath year will be food for you—for yourself, your male and female servants, and the hired worker and temporary resident who live among you, 7 as well as for your livestock and the wild animals in your land. Whatever the land produces may be eaten. The Year of Jubilee 8 “‘Count off seven sabbath years—seven times seven years—so that the seven sabbath years amount to a period of forty-nine years. 9 Then have the trumpet sounded everywhere on the tenth day of the seventh month; on the Day of Atonement sound the trumpet throughout your land. 0 Consecrate the fiftieth year and proclaim liberty throughout the land to all its inhabitants. It shall be a jubilee for you; each of you is to return to your family property and to your own clan. 11 The fiftieth year shall be a jubilee for you; do not sow and do not reap what grows of itself or harvest the untended vines. 12 For it is a jubilee and is to be holy for you; eat only what is taken directly from the fields. 13 “‘In this Year of Jubilee everyone is to return to their own property. 14 “‘If you sell land to any of your own people or buy land from them, do not take advantage of each other. 5 You are to buy from your own people on the basis of the number of years since the Jubilee. And they are to sell to you on the basis of the number of years left for harvesting crops. 16 When the years are many, you are to increase the price, and when the years are few, you are to decrease the price, because what is really being sold to you is the number of crops. 17 Do not take advantage of each other, but fear your God. I am the LORD your God. 18 “‘Follow my decrees and be careful to obey my laws, and you will live safely in the land. 9 Then the land will yield its fruit, and you will eat your fill and live there in safety. 20 You may ask, “What will we eat in the seventh year if we do not plant or harvest our crops? ” 21 I will send you such a blessing in the sixth year that the land will yield enough for three years. 22 While you plant during the eighth year, you will eat from the old crop and will continue to eat from it until the harvest of the ninth year comes in. 23 “‘The land must not be sold permanently, because the land is mine and you reside in my land as foreigners and strangers. 4 Throughout the land that you hold as a possession, you must provide for the redemption of the land. 25 “‘If one of your fellow Israelites becomes poor and sells some of their property, their nearest relative is to come and redeem what they have sold. 26 If, however, there is no one to redeem it for them but later on they prosper and acquire sufficient means to redeem it themselves, 27 they are to determine the value for the years since they sold it and refund the balance to the one to whom they sold it; they can then go back to their own property. 8 But if they do not acquire the means to repay, what was sold will remain in the possession of the buyer until the Year of Jubilee. It will be returned in the Jubilee, and they can then go back to their property. 29 “‘Anyone who sells a house in a walled city retains the right of redemption a full year after its sale. During that time the seller may redeem it. 30 If it is not redeemed before a full year has passed, the house in the walled city shall belong permanently to the buyer and the buyer’s descendants. It is not to be returned in the Jubilee. 1 But houses in villages without walls around them are to be considered as belonging to the open country. They can be redeemed, and they are to be returned in the Jubilee. 32 “‘The Levites always have the right to redeem their houses in the Levitical towns, which they possess. 33 So the property of the Levites is redeemable—that is, a house sold in any town they hold—and is to be returned in the Jubilee, because the houses in the towns of the Levites are their property among the Israelites. 34 But the pastureland belonging to their towns must not be sold; it is their permanent possession. 5 “‘If any of your fellow Israelites become poor and are unable to support themselves among you, help them as you would a foreigner and stranger, so they can continue to live among you. 36 Do not take interest or any profit from them, but fear your God, so that they may continue to live among you. 37 You must not lend them money at interest or sell them food at a profit. 38 I am the LORD your God, who brought you out of Egypt to give you the land of Canaan and to be your God. 39 “‘If any of your fellow Israelites become poor and sell themselves to you, do not make them work as slaves. 0 They are to be treated as hired workers or temporary residents among you; they are to work for you until the Year of Jubilee. 41 Then they and their children are to be released, and they will go back to their own clans and to the property of their ancestors. 42 Because the Israelites are my servants, whom I brought out of Egypt, they must not be sold as slaves. 43 Do not rule over them ruthlessly, but fear your God. 44 “‘Your male and female slaves are to come from the nations around you; from them you may buy slaves. 5 You may also buy some of the temporary residents living among you and members of their clans born in your country, and they will become your property. 46 You can bequeath them to your children as inherited property and can make them slaves for life, but you must not rule over your fellow Israelites ruthlessly. 47 “‘If a foreigner residing among you becomes rich and any of your fellow Israelites become poor and sell themselves to the foreigner or to a member of the foreigner’s clan, 48 they retain the right of redemption after they have sold themselves.

One of their relatives may redeem them: 49 An uncle or a cousin or any blood relative in their clan may redeem them. Or if they prosper, they may redeem themselves. 50 They and their buyer are to count the time from the year they sold themselves up to the Year of Jubilee. The price for their release is to be based on the rate paid to a hired worker for that number of years. 51 If many years remain, they must pay for their redemption a larger share of the price paid for them. 52 If only a few years remain until the Year of Jubilee, they are to compute that and pay for their redemption accordingly. 3 They are to be treated as workers hired from year to year; you must see to it that those to whom they owe service do not rule over them ruthlessly. 54 “‘Even if someone is not redeemed in any of these ways, they and their children are to be released in the Year of Jubilee, 55 for the Israelites belong to me as servants. They are my servants, whom I brought out of Egypt. I am the LORD your God. Deuteronomy 15:1-18 New International Version (NIV) The Year for Canceling Debts 15 At the end of every seven years you must cancel debts. This is how it is to be done: Every creditor shall cancel any loan they have made to a fellow Israelite. They shall not require payment from anyone among their own people, because the LORD’s time for canceling debts has been proclaimed. 3 You may require payment from a foreigner, but you must cancel any debt your fellow Israelite owes you. 4 However, there need be no poor people among you, for in the land the LORD your God is giving you to possess as your inheritance, he will richly bless you, 5 if only you fully obey the LORD your God and are careful to follow all these commands I am giving you today. For the LORD your God will bless you as he has promised, and you will lend to many nations but will borrow from none. You will rule over many nations but none will rule over you. 7 If anyone is poor among your fellow Israelites in any of the towns of the land the LORD your God is giving you, do not be hardhearted or tightfisted toward them. 8 Rather, be openhanded and freely lend them whatever they need. 9 Be careful not to harbor this wicked thought: “The seventh year, the year for canceling debts, is near,” so that you do not show ill will toward the needy among your fellow Israelites and give them nothing.

They may then appeal to the LORD against you, and you will be found guilty of sin. 10 Give generously to them and do so without a grudging heart; then because of this the LORD your God will bless you in all your work and in everything you put your hand to. 11 There will always be poor people in the land. Therefore I command you to be openhanded toward your fellow Israelites who are poor and needy in your land. Freeing Servants 12 If any of your people—Hebrew men or women—sell themselves to you and serve you six years, in the seventh year you must let them go free. 3 And when you release them, do not send them away empty-handed. 14 Supply them liberally from your flock, your threshing floor and your winepress. Give to them as the LORD your God has blessed you. 15 Remember that you were slaves in Egypt and the LORD your God redeemed you. That is why I give you this command today. 16 But if your servant says to you, “I do not want to leave you,” because he loves you and your family and is well off with you, 17 then take an awl and push it through his earlobe into the door, and he will become your servant for life.

Do the same for your female servant. 18 Do not consider it a hardship to set your servant free, because their service to you these six years has been worth twice as much as that of a hired hand. And the LORD your God will bless you in everything you do. Psalm 37:26 New International Version (NIV) 26 They are always generous and lend freely; their children will be a blessing. [a] Psalm 112:5 New International Version (NIV) 5 Good will come to those who are generous and lend freely, who conduct their affairs with justice. Proverbs 19:17 New International Version (NIV) 7 Whoever is kind to the poor lends to the LORD, and he will reward them for what they have done. Proverbs 22:7 New International Version (NIV) 7 The rich rule over the poor, and the borrower is slave to the lender. Deuteronomy 24:6 New International Version (NIV) 6 Do not take a pair of millstones—not even the upper one—as security for a debt, because that would be taking a person’s livelihood as security. Deuteronomy 24:10-13 New International Version (NIV) 10 When you make a loan of any kind to your neighbor, do not go into their house to get what is offered to you as a pledge. 1 Stay outside and let the neighbor to whom you are making the loan bring the pledge out to you. 12 If the neighbor is poor, do not go to sleep with their pledge in your possession. 13 Return their cloak by sunset so that your neighbor may sleep in it. Then they will thank you, and it will be regarded as a righteous act in the sight of the LORD your God. Deuteronomy 24:17 New International Version (NIV) 17 Do not deprive the foreigner or the fatherless of justice, or take the cloak of the widow as a pledge. Exodus 22:25-27 New International Version (NIV) 5 “If you lend money to one of my people among you who is needy, do not treat it like a business deal; charge no interest. 26 If you take your neighbor’s cloak as a pledge, return it by sunset, 27 because that cloak is the only covering your neighbor has. What else can they sleep in? When they cry out to me, I will hear, for I am compassionate. Proverbs 6:1-5 New International Version (NIV) Warnings Against Folly 6 My son, if you have put up security for your neighbor, if you have shaken hands in pledge for a stranger, 2 you have been trapped by what you said, nsnared by the words of your mouth. 3 So do this, my son, to free yourself, since you have fallen into your neighbor’s hands: Go—to the point of exhaustion—[a] and give your neighbor no rest! 4 Allow no sleep to your eyes, no slumber to your eyelids. 5 Free yourself, like a gazelle from the hand of the hunter, like a bird from the snare of the fowler. Proverbs 22:26-27 New International Version (NIV) Saying 4 26 Do not be one who shakes hands in pledge or puts up security for debts; 27 if you lack the means to pay, your very bed will be snatched from under you.