What does the Bible say about bankruptcy?
The Bible does not say anything specifically about bankruptcy, but there are principles in both the Old and New Testaments that might help know how we should act in regard to debt and related matters.
First, God teaches that we should perform honest, honorable work and pay our taxes and our debts, both personal and business. See Eph. 4:28, Rom. 13:710.
However, what happens when we cannot pay our debts in a timely manner or we cannot pay them at all? In the Old Testament, God required Israel to forgive all debts owed and release all slaves that were owned every seven years. This shows God’s mercy and compassion that was to be expressed in these situations so that no one would unnecessarily oppress others. See Lev. Ch. 25.
But, we do not have control over people forgiving us debts today, so the most reasonable thing to do is, approach the person or company we owe and seek to make arrangements regarding payments, even if we can only partially pay the debt or if will will take us a longer period of time to pay it. See Luke 16:1-15.
If this does not work, then we can use the laws regarding bankruptcy to try to work out payment plans to satisfy creditors. Here, the court can help impose fair payment plans so we can dispose of our debts in an honorable way.
By Gary Hunt