Let’s look at personal and/or family finances for the next two weeks. This week, we need to lay the foundation for next week, which will be simple, practical ways to getting out of debt. If you consider a few statistics about family finances, you’ll agree it’s necessary to get a hold on each aspect of the slippery slope, which, because if you look at it, one leads to the next, which leads to the next, and so on.
For example, the average household in America has a credit card debt around $8,000.00. Credit cards are nothing more than an instant loan that you borrow from as the need arises and then are expected to pay back at some predetermined schedule. Well, it’s because of credit cards, and other traditional loans that contribute to the fact that approximately 43% of American families actually earn less than what they spend each year. That’s easy to do. If I take out a loan for a car for $20,000 and I charge a high-definition television set for $5,000 and then do home repairs with a line of equity I opened on our house, it doesn’t take long to spend more than we earn in a year. And when you spend more than you earn…you’re in debt.
Now this debt can lead people to have gotten themselves in too far over their head to the point where bankruptcy is the only seemingly reasonable way out of debt. Over the past ten years, personal bankruptcies (not those of corporations) have doubled. That means that individuals and families are filing for bankruptcy. The borrower wants to be let off the hook for debts incurred, while the entity that took faith in the borrower is left to take the loss. So, let’s take a serious Biblical look at borrowing and lending (loans), debts, and personal and family bankruptcy.
I’ll concede immediately that some loans are unavoidable. No one in the circles I run in can pay cash for a house, and with today’s rates to rent apartments, sometimes a monthly mortgage is equivalent to a monthly rent payment, and in some cases, may even be less. So of course, there is little chance of living in this world without needing to borrow money for some major high-end purchases, like homes.
There are some things to consider when determining the need to take out a loan. First, when you enter into the contract with the loan company, you are essentially promising to pay them back. You are giving them your word and in response, they are giving you the money in good faith. If I want to sell someone in Oregon my compound hunting bow, and he promises to send the money after he receives it in the mail so he can inspect it first, if I trust him, I will send it out and wait for the money to follow. That’s done without contracts, but in the realm of financial lending, there are extensive contracts that come down to one simple premise: the lending institution is taking you at your word.
The second thing to understand about taking out a loan is that you have now entered into a relationship with another entity that is not equitable. In other words, there is a subservient role played on the part of the borrower. Yes, the loan company takes you at your word, but not without recourse should you fail in your duties as a borrower. Liens can be put against assets as collateral and the loan companies can hold these things over our heads. This relationship the Bible likens to a person being held as a slave to his master: “The rich ruleth over the poor, and the borrower is servant to the lender” (Proverbs 22:7).” That one Biblical truth is manifested in many ways as we take out more and more loans for more and more things to the point where we have taken out so many loans, and our debt is so oppressive, that we are truly slaves.
In Exodus 22:14, God never condemns borrowing from another, but that we need to be ready to repay fully: “And if a man borrow aught of his neighbor, and it be hurt or die, the owner thereof being not with it, he shall surely make it good.” In other words, if I borrowed an ox to plow a field, and in my care, I failed to keep it healthy and thus repay it back to the person from whom I borrowed, I needed to make full restitution to the one who loaned me the ox. The analogy goes like this. The money belongs to someone else. I’m borrowing it to buy a car. If I go broke and lose the money that rightfully belongs to someone else, I’m still legally and morally bound to come up with the full amount I borrowed. But, if I owe more people money than I am able to pay back, I have put myself in debt.
Loans should be taken on with great vigilance and wisdom. Again, in Exodus, God puts forth the game plan because He knows people have to borrow things from one another from time to time. But finding ourselves in debt is wrong for the Christian family in many ways. And though we can’t find a specific dictate about debt being sinful, and there’s no eleventh commandment saying “Thou shalt not get in over your head,” there are principles in the Bible that hint at the fact that Christians can, at the very least, displease God because of the grip debt has on us and the limitations debt puts on us.
For example, in the Sermon on the Mount in Matthew 5:42, Jesus says, “Give to him that asketh thee, and from him that would borrow of thee turn not thou away.” Well, if Jesus is asking Christians to be ready to lend to those in need, how well can we do that when we are in need? When we have hundreds of dollars in debt payment each month, there is no disposable income that we are able to give to those in need. There’s no way the early church in Acts and in some of Paul’s epistles could have supported each other by pooling their resources together if many in the church were in over their heads. So the first problem with debt is that God’s people can’t even be taken care of by their own brethren.
The next problem with being in debt is the foolish notion that the support of the church through tithes and offerings can take a back seat to monthly bills, but it does in many cases. Here’s a modern day illustration. The church rents a building. The church grows beyond what the rented building can handle. The people clamor for a church. A church is built using loans that a company believes will be paid back because a pastor believes his congregation will tithe faithfully and give to the building fund. Once the novelty of the new building wears off, the people begin seeing the building fund as an expenditure they can omit from their family budget. Now the church is in debt and can’t spend the resources it wants to reach the community for Christ. While we’re on the topic of evangelism, what happens to all the missionaries who are budgeted out of family finances? What happens to the people the missionary serves when their support is less than their needs? By the way, in most mission drives a pledge is called a “faith PROMISE.”
Here’s a third reason debt is potentially sinful. Suppose a husband and wife are living the high life with good paying jobs that are paying all the bills each month. Life’s great. But now, all of a sudden, God calls them into the ministry. Uh oh! The ministry, in most cases, is not a six-figure income. Their first thought is how they are going to pay the loans on a minister’s salary. The dilemma is whether to give up their jobs and all their jobs afford, or go deep into debt by choosing God’s vocation for their life. See, being in debt and living above our means will not free us to lower our income potentially to serve God in the capacity which He calls us. How much easier it would be to give up high-paying jobs to enter the ministry if we had no new car loans, no credit cards, no student loans, and so on.
Debt is the result of pursuing, in most cases, unneeded material goods. Here’s a great Biblical truth to apply and avoid getting into debt. “Lay not up for yourselves treasures upon the earth…but lay up for yourselves treasures in heaven” (Matthew 6:20). One day, that expensive country club you belong to will be grown over with grass and weeds. One day, that car you can barely afford will be rusting in a junkyard. But for eternity, what we do down here will be ours in Heaven forever. Imagine how much longer we could enjoy $30,000 we gave to missions in our lifetime verses the $30,000 Mercedes Benz we owned for six or seven years before trading it in for a more expensive model. Yes, debt can ruin us in this lifetime and rob us of our eternal treasures.
Rest assured. God wants our debts to be paid in full. In II Kings 4:1-7, a widow was in trouble with her husband’s debtors and was about to lose her children because of her debt. After Elisha performed a miracle, she had more than enough to pay her husband’s debtors. Elisha instructed her to pay off her debts and then live off the remainder. Notice, she had debts, and she was to pay them before enjoying the remainder of the money for anything else in life. Also, do not, out of a sense of duty or concern, take over anyone else’s debt. As Proverbs 22:26-27 explains, if you don’t have the money to handle your own affairs and adequately take on someone else’s debt, you run the risk of losing your own things.
There are two types of bankruptcy for individual and family finances. Chapter 13 absolves an individual or family from some of their debt. The other is Chapter 7, which essentially eliminates all debt (there are limitations and conditions in each filing of chapters 7 & 13). But in the end, bankruptcy is elimination and “forgiveness” of at least some debt that the debtor has determined they cannot pay.
There are those who do not feel that filing for bankruptcy is sinful. But consider Psalm 37:21, “The wicked borroweth, and payeth not again…” God considers not repaying a loan a wicked deed. Consider what Ecclesiastes says, “When thou vowest a vow unto God, defer not to pay it; for he hath no pleasure in fools: pay that which thou hast vowed. Better is it that thou shouldest not vow than that thou shouldest vow and not pay” (5:4-5). If God wants us to make good on what we vow to Him, it’s reasonable to infer that God wants us honoring our vows to each other, regardless of the context of the vow (loans, marriage, etc..).
Those who support the notion that Christians can file for bankruptcy and still honor God in their hearts point to Deuteronomy 15:1-2, “At the end of every seven years thou shalt make a release. And this is the manner of the release: Every creditor that lendeth aught unto his neighbor shall release it; he shall not exact it of his neighbor, or of his brother, because it is called the Lord’s release.” That sounds reasonable on the surface, but look at it in the light of Exodus 22:14 that we looked at earlier.
If I borrow the ox and it dies in my care, I am responsible for paying the owner who loaned it to me. But, suppose I’m a poor farmer who can’t grow crops because the ox I was using to till the ground died. I can’t sell the crops I can’t grow and can thereby never repay that debt. This release will allow me to get out from under the debt I owe the farmer. I am no longer bound by law to repay that farmer. However, I did understand the terms of the lending of the animal, and took for granted all would work out well, so even though I’m no longer legally bound, you could make a case that I am still morally bound to pay the debt.
So, in that context, consider this. I have full intentions of repaying a loan. At the time I’m signing it, I’m healthy and enjoy a stable job. Now, a year later, my health is failing and I can’t work and then get fired from my job and find myself unemployed. Should I file for bankruptcy in that case? It’s through no fault of my own I can’t pay my bills. But wait a minute. Filing for Chapter 7 will make me legally not responsible for my debt, but aren’t I still morally bound to repay my debts regardless of circumstances? I’d say we are still morally obligated to avoid filing for bankruptcy, because it’s never a circumstance that is through “no fault of our own” when it comes to not being able to repay, and here’s why I say that.
What’s a loan? Something I will pay back in the future. What’s the problem? “Charge them that are rich in this world, that they be not highminded, nor trust in uncertain riches, but in the living God, who giveth us richly all things to enjoy” (I Timothy 6:17). If God implores the rich not to trust in the uncertainty of future monies, then even the more, we who are no where near being called “rich” should not tempt God for provisions beyond what He promises in Matthew 6:24-33, which is basically food, shelter, and clothing.
If we find ourselves in dire situations because our lives and/or finances have taken a drastic turn for the worse, we may be able to legally file for bankruptcy, but if we choose to enter into a contract with only our uncertain hope we’ll be able to pay it off, we should morally honor that debt and NOT choose bankruptcy. So next week will be devoted to eliminating debt in ways that are God-honoring and do not include bankruptcy.