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Should a Christian Declare Bankruptcy?
November 4th, 2009 | 
Author: 
Living in the hardest hit housing market in the country while surviving on a real estate–dependent income is a lamentable combination. I don’t recommend it. We are blessed to have our home, to have our food supplies and to be able to afford fresh groceries. We have two (yes, two) vehicles, and we put gas in them when we need to. But the fact is, things ain’t pretty right now. (You know they’re ugly when I say “ain’t!”) It could (and might) get a lot worse. It could (and will) eventually get better. In the meantime, losing the house is always on the fringe of our thoughts.
I know others who have it worse, much worse. I know people who have lost their farms, homes, or jobs. I also know people who madly spent themselves into a mire of debt, spent their home equity, and then freely gave up their houses and abandoned their debts without a glance back. We also know companies who have declared bankruptcy and walked away from their financial obligations, money owed not only to corporations but to individuals, to us.
A few short years ago, we had a lot of sweat and blood (a little too much blood) equity in our house. In between running a business and catering to the needs of a pregnant wife and (then only) four children, my husband worked hard to build this place we call home. Today, although we did not spend it, the equity is gone and we are now floating upside-down. Paying off the enormous void between what we owe and what our charming abode is worth takes a sizeable chunk out of our rapidly shrinking income. If we were to walk away from our house right now, we would be in a situation that could allow us to focus on the music mission. We would also be nearly debt-free. It is a temptation.
“What’s a Christian to do when she doesn’t know what’s right and what’s wrong?” I ask myself, out loud…talking to myself…again.
“Look it up in the Bible,” a child’s voice calls out. Oh to have had such wisdom before the grey hair!
I obey.
The wicked borroweth, and payeth not again:
but the righteous sheweth mercy, and giveth.
~Psalm 37:21
I love the King James, but you, perhaps, may not, so:
The wicked borrow and do not repay,
but the righteous give generously.
~Psalm 37:21
That settles it. A Christian should not voluntarily walk away from his debt.
When faced with economic hardship, a Christian must make every effort to shave off unnecessary expenses. (Satellite television, Starbucks, and even date night are unnecessary expenses, in case you were wondering). Debt settlement is a responsible debt-reduction option that should be pursued before bankruptcy is considered. Having experienced this ourselves, I can assure you it is doable and extremely helpful if you are in a tight place.
If, after seeking guidance, stripping the budget, and looking into debt settlement, there is no option but to declare bankruptcy, the Christian should still make every attempt to repay the debts as soon as he is able. Generally companies will not accept post-bankruptcy repayment efforts, in which case your debt is forgiven and obligation has ended. I can, however, think of a small business or two that would benefit from the fulfillment of currently abandoned financial obligations.
My last word: tough economic times can be frightening. You do not need to go it alone.
But my God shall supply all your need according to his riches in glory by Christ Jesus.
Philippians 4:19 (KJV)
While I was compensated for this blog entry, it does represent my views at the time of writing. Notable Blogger will never publish anything that conflicts with our views, ethics, or Christian values.
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Tags: 30 Responses to “Should a Christian Declare Bankruptcy?”
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Sometimes it is too hard to declare bankruptcy believing it cannot be the best solution to our debt problems, especially, if they appear insurmountable. Christian should still make every attempt to repay his or debts.
Justin @ Bankruptcy public records´s last undefined ..Response cached until Fri 29 @ 16:44 GMT (Refreshes in 23.67 Hours)
Everyone, no matter what their religion should use their best efforts to pay off what they owe. I agree, cancelling the satellite tv etc and everything else so that you can pay them.
But sometimes that just is not enough. Sometimes no matter what you do, you will not be able to keep up with paying the huge sums of interest that these credit companies charge.
Then I think that there is no shame in bankruptcy. I believe that most or nealy all people who go bankrupt, do so as the very very very last option.
When they just cannot take any more, and can’t see any other way through.
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Everyone, no matter what their religion should use their best efforts to pay off what they owe. I agree, cancelling the satellite tv etc and everything else so that you can pay them.
But sometimes that just is not enough. Sometimes no matter what you do, you will not be able to keep up with paying the huge sums of interest that these credit companies charge.
Then I think that there is no shame in bankruptcy. I believe that most or nealy all people who go bankrupt, do so as the very very very last option.
bankruptcyattorneyfees´s last blog ..Our Privacy Policy
Thank you for your comment. I agree that if everything possible is done first, and bankruptcy is the only remaining option, it can be pursued. Unfortunately, in our business we see far too many people walking away from their homes simply because the value is no longer there. Where are the ethics in that? It is sad when someone HAS to declare banruptcy. It is upsetting when someone uses it as the “easy” way out…even though it really isn’t all that easy.
It’s a sad thing, but for many it is the only way to keep their family from going under -and maybe even going homeless!
We were real estate investors and all of our homes got to the point where they were underwater. We had to do something, as our $3000.00 mortgage on our main house was just too much as our income from our construction business drastically plumetted. We had no choice but to allow our home to go into foreclosure and we are now in bankruptcy.
We could have filed Chapter 7 and had all of our debts wiped out. But we chose , instead, to file Chapter 13, and reorganize to pay our debts off. We will be paying for the next 5 years and it will be a struggle, but we will do it. So not every person who files bankruptcy is walking away scott free, especially considering the lasting damage it does to your credit.
We did not get to this point by buying a lot of stuff or by having fancy cars, etc. We have no car payments at all and we don’t have “toys.” But we were house poor. We put all our money into real estate, thinking that would be the best investment, and we lost it all.
Every situation is different and until things improve, there will be more foreclosure and more bankruptcy. At some point, it becomes about the survival of your family and putting a roof over their heads. Bankruptcy is financial protection -to keep your creditors and mortgage holders from taking EVERY LAST THING.
Kris, you make my point well. You have used bankruptcy wisely. That is what it is for–protection when you have run out of options. I commend you for your choices, and pray that your situation, our situation, and our nation’s economy rapidly take a turn for the better. Thank you for sharing your story.
If a person is able to pay your debts, then he or she ought to repay them. If the debts cannot be repaid in whole or part, then a number of options are available including a Chapter 7 or Chapter 13 bankruptcy.
A well thought out presentation of the facts. I just wish more people would be so thorough and enlightened. Thank you.
Christian or not, we all have our fair share of debts in this life.
I agree, if you are a true follower of christ, it is your responsibitlty to take responsibility
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