As a Christian, can I file for a bankruptcy? If I borrow money from friends and family, since I file for bankruptcy, does that mean I don’t have to return the money?

During the last several years, the economy in the United States has gone through a valley, and left many people unable to pay their bills and forced them to file for bankruptcy. Is the economy to blame for leading people to bankruptcy? In most cases, probably not. In most cases, people knew they were getting into too much debt, but, not wanting to get behind on the Joneses across the street, they bought homes and cars they could not afford. And when the economy went south, many realized the mistakes they made, gave up their homes, filed for bankruptcies and settled into something small, comfortable, and affordable.

Certainly, there were and are legitimate bankruptcies: bankruptcies that involve health issues, medical bills, loss of ability to work, and a prolonged loss of a job in a tough economy.

But, after filling for bankruptcy, am I all free to start all over? Do I still have to return money that I borrowed? Does the Bible say anything about this issue? Though the Bible doesn’t mention bankruptcy, here are some things we can be certain, when reading the Bible.

1. God’s laws supersede national and local laws.  Just because the law says we can file for bankruptcy and not have to pay back anyone, doesn’t mean that it is God’s best for us.

2. Here is what the Bible says about paying back what we owe:

Psalm 37:21
The wicked borrows and does not pay back, but the righteous is gracious and gives.

Ecclesiastes 5:5
It is better that you should not vow than that you should vow and not pay.

When we took out a credit card loan or borrowed money from a family member or friend, we made a vow to pay them back. Though the government says we don’t owe our lenders their money anymore after filing a bankruptcy, those lenders probably still want the money, which we vowed to pay back. If the businesses themselves forgave the debt, it would be a different story.

3. It is of my opinion that we must do everything in our power to return borrowed money, especially if the lender is a family member or friend, even if takes a small step at a time and the rest of our life to do it ($5 a month). The bible says that the borrower is a servant to the lender (Proverbs 22:7). No matter how we defend our self with the law, our relationship with the family member or friend from whom we borrowed the money will never be the same. The reputation damage that they can cause us will probably be more pricier than the debt we don’t pay them. Certainly, it is worth our efforts to sit down with them, ask them for debt reduction, ask them for other ways to pay them back like work for them, but, we must do everything on our part, to be at peace with one another (Romans 12:18).

If you are reading the blog and you are on the LENDER (private, personal) side of this discussion, here are some words of advice to you:

1. The Bible says, “Give to everyone who asks you, and if anyone takes what belongs to you, do not demand it back.” (Luke 6:30). When lending money to a friend or family member, in our own minds, we must treat it as a gift to them, without expecting anything in return.

2. Once money is out of your hands, you have no control of it. With a Christian relationship on the line, the Bible says, “Does any one of you, when he has a case against his neighbor, dare to go to law before the unrighteous, and not before the saints?” (1 Corinthians 6:1). We are told that it is better to be defrauded than to lose our witness by suing one another (1 Corinthians 6:7).

3. When things are out of your control and the money you let someone borrow is not being returned, it is best to trust God in that He is the ultimate judge and He is a God of justice. Instead of spending time & energy on trying to harass, degrade and let others know about the person who is not returning the money they borrowed, trust the ultimate God of justice; He will repay you in time, whether it will be through this same person, or through another circumstance. And, God will certainly work in the life of the borrower, to correct him and teach him the value of keeping their promise.