The Biblical Perspective
So what does The Bible say about bankruptcy? Does it even mention bankruptcy? There has been much debate over this question, and it could surely be answered many ways. But since this is my bankruptcy story, the only answer you'll find here is my answer.
I've thoroughly searched The Bible for passages relating to debt and/or bankruptcy. I've found three of note:
Romans 13:7
Pay everyone whatever you owe them. If you owe taxes, pay them. If you owe tolls, pay them. If you owe someone respect, respect that person. If you owe someone honor, honor that person.
13:8 Pay your debts as they come due.
My interpretation: Clearly, it is expected of us to make every attempt to pay our debts.
Proverbs 22:27
If thou have not wherewith to pay, why should he take away thy bed from under thee?
My interpretation: If a debtor is unable to pay what he owes, this should not automatically result in him giving up everything he owns to satisfy the debt.
Deuteronomy 15:1
At the end of every seven years, you must cancel debts.
15:2 This is what you will do: If you've made a loan, don't collect payment on the debt your neighbor still owes you. Don't demand that your neighbor or relative pay you, because the time for suspending payments on debts has been proclaimed in the LORD'S honor.
My interpretation: In ancient Israel, as instructed by Moses, creditors were to cancel debts that were not yet paid every seven years. This is a built in fresh start for those who -- for whatever reason -- find themselves too deep in the debt hole. Why would Moses teach such a thing? I have a theory.
Look at the world today. Banks get bigger and bigger as they gobble up competitors. Ninety percent of the world's wealth is held by ten percent of the population. And the other ninety percent borrows or does without. How likely do you think the mega-conglomerates like Chase, Bank of America, and others would be to lord their wealth over the majority of the population if they knew that their loans would be worthless in just seven years? Such requirements today would reduce the number of large loans made and decrease the total debt burden for an individual to that which he could reasonably pay off in less than seven years. The end result: less poverty, less debt, less bankruptcy.
Read The Bible and interpret it as you will. I acknowledge that we should attempt to pay off our debts. But what happens when you get in the debt hole too deep? Should the banks be able to shovel the dirt in after you with higher finance charges and late fees? No! They, too, should have some responsibility for their lending practices. They should help to pull you up out of that hole, dust you off, and send you on your way with a fresh start. That's my opinion.