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Should Christians file for Bankruptcy?

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Living a “full life,” for sure, is a promise that was spoken in the Bible by Jesus Himself (John 10:10). But sometimes, as one tries to pursue a better life or a promising business, irreversible decisions (and sometimes financially unwise ones) are made and later lead to huge debts beyond a person’s capacity to pay given his earnings or lack of it.

At other times, a person experiences an unexpected catastrophe or a sickness which causes extreme losses or expenditures. But regardless of the

Christian Bankruptcy
Christian Bankruptcy

cause of the bankruptcy, God’s word of course is never forfeited. There is hope for everyone who desires to pursue God’s purpose for their life.

And my God will meet all your needs according to his glorious riches in Christ Jesus. (Philippians 4:19 NIV)

According to Yahoo Finance, the top reasons for filing for bankruptcy are “medical expenses, job loss and excessive use of credit.” When one is faced with tremendous pressure from creditors and billing agents, it is easy to get shaken right away and start rummaging through a list of solutions – one of which is to file for bankruptcy.

Many have questioned whether it is righteous or moral to file for either kind of bankruptcy, knowing that it would probably mean not being able to adhere anymore to the original terms of one’s agreement with his creditors. As provided by the U.S. Securities and Exchange Commission (for either individuals or businesses), Chapter 7 bankruptcy results in a “liquidation” or selling of assets to pay off debts while Chapter 11 bankruptcy calls for a reorganization of the business with expectations of resuscitating it back to health.

In both cases, a trustee is assigned to oversee the said liquidation or reorganization, but this does not guarantee that all creditors will be paid in full, let alone with the appropriate interest. Depending on the how bankrupt the company is, most probably, creditors will obtain significant losses. Furthermore, an individual who enters the same mess again is allowed to file for bankruptcy again after seven years have passed since the last time he had filed. (Read: An Overview of Corporate Bankruptcy)

Thus, the questions, “Is it righteous? Should born again believers in Christ be filing for Bankruptcy?”

There may be no “yes” or “no” answer to this questions but it is important to remember that forgiving debts is indeed found in the Bible. “Forgive us our debts as we forgive our debtors…” (Matthew 6:12). “This is how my heavenly Father will treat each of you unless you forgive your brother or sister from your heart.” (Matthew 18:21-35)

But if one would notice, these are reminders that as Christians we should be merciful and forgiving. They are not provisions that give us the right to demand mercy from people. Instead, Romans 13:7-8 commands us to, “Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed. Owe no one anything, except to love each other, for the one who loves another has fulfilled the law.”

It is a commendable thing that the law has provisions that somehow reflect God’s mercy and desire to give His people a second chance! But just like what the Apostle Paul said in Romans 6:15, “What then? Shall we sin because we are not under the law but under grace? By no means!”

Therefore, if one truly wants to please God, he will take to heart these verses and more importantly, take his situation as a wake up call to to seek God intensely because God will use circumstances for the good of those who love Him. God’s arm is not too short. He will move powerfully if we will let Him.

Do not put your trust in princes, in mortal men, who cannot save. (Psalm 146:3 NIV)

One of the things that our generation needs to repent of is our misplaced trust on our ability and our economy’s “stability.” According to Harvey Nowland in his article Financial Freedom God’s Way, if one wants to get our of debt and stay out of debt, the first thing he should do is “Transfer ownership to God.” This is a radical but necessary step to make. Transferring ownership means making every financial decision subject to God’s will and His word. It includes tithing and consecrating our finances for the purpose of glorifying God.

This is what the LORD says: “Cursed is the one who trusts in man, who depends on flesh for his strength and whose heart turns away from the Lord. Jeremiah 17:5 (NIV)

The call to trust and depend on God may sound and look really absurd in a very humanistic world we live in where everyone seems to always be offering a solution to our problems. Even Mr. Google has an answer to every question. But take for instance the widow of Zarepath in 1 Kings 17:7-16. Because of the famine in the land, she was left with but a handful of flour and a little oil. But when a man of God came to her house, she obediently baked for him even if it meant that she would be giving away her last meal. In return, God multiplied the little that she gave!

If we would turn from wrong patterns and commit our finances to God, he can make miracles happen!

Anyone who believes in him will never be put to shame. (Romans 10:11 NIV)

This radical trust in God by His grace should lead to radical changes in lifestyle. This could mean breaking habits and mindsets that lead to excessive




spending. It might mean, cutting credit lines and learning to wait for God’s answer to our prayers. It could mean learning to cling to God in times of leanness and as one does this, he will also discover that God is his most satisfying reward….

“Better is a little with the fear of the Lord than great treasure and turmoil with it.” (Proverbs 15:16  NASB)

I have learned to be content in whatever circumstances I am. I know how to get along with humble means, and I also know how to live in prosperity; in any and every circumstance I have learned the secret of being filled and going hungry, both of having abundance and suffering need.” (Philippians 4:11-12  NASB)

It could mean, giving more to God and asking Him to enable us to completely place our trust in Him. Whatever it would mean for us, it all begins with going back to the cross of Jesus where we can surrender our lives to Him and allow Him to do the impossible in our life.

The bible asks us to tithe 10% of our income to God’s work but still there are many Christians who don’t do this. Instead they would prefer to say that this is an old testament teaching instead of seeing it as supporting the advancement of Christianity in the world.

Let’s take a look at what the bible says about what happens to our finances as we tithe. Malachi 3:8-12:“Will a mere mortal rob God? Yet you rob me. “But you ask, ‘How are we robbing you?’ “In tithes and offerings. You are under a curse—your whole nation—because you are robbing me. Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it. I will prevent pests from devouring your crops, and the vines in your fields will not drop their fruit before it is ripe,” says the Lord Almighty. “Then all the nations will call you blessed, for yours will be a delightful land,” says the Lord Almighty.

So we see that the Lord says when we tithe what we have will be blessed.  He will bring more to us from tithing and He will prevent the enemy from destroying what we are building.  This is a promise.  God’s protection of your finances because you tithe. God will teach you how to manage your debt and how to consolidate the debt so that you are the head and not the tail.  You are above and not beneath.  You become the lender and not the borrower.

Here is a prayer for you if you’ve found yourself in a position where you’re considering filing for Chapter 7, 11 or 13.

Merciful Father, I thank you that You love me and that Your plans for me are good (Jeremiah 29:11). Forgive for my sins… (mention the sins that God would convict your heart of) for my lack of trust, for being materialistic, for being proud, for being doubtful…

Abba, give me the grace and courage to surrender all to You. I transfer ownership of my finances to You. I surrender my rights to reputation, pride, and luxury. I desire to see You move powerfully in my heart, my family and our finances.

Jesus, as You teach me humility, enable me to find fullness of joy in Your presence. Teach me to run to You and not to material things for comfort and fulfillment! I want to know You more as Jehovah Shalom, my peace, and Jehovah Jireh, my provider! Come to my rescue!

And now I thank You that I am fully forgiven! That You were the first one to forgive all my debts and sins! I release forgiveness too to the people who have wronged me. I thank You for the grace that You are giving to me for me to be victorious in this situation. I declare that You will work things out for the good of Your child who loves You! I thank You for the new life You are giving, for the provision to cover all my debts, for the mercy that flows through my life.  Grant me a willing heart to tithe into Your Kingdom and give wisdom, knowledge and understanding to get from under the pressure of debt, In Jesus’ name, Amen.

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