Can a Christian file for bankruptcy?
In medieval times, an unpaid debt resulted in:
Destroy his trading bench (means of making a living)
In Italian, broken bench = "banca rotta" - this is the origin of the word - bankrupt.
Before the 20th century:
Rules favored the creditor
Rules were very harsh
In England, 1542, under Henry VIII, a debtor could be imprisoned or executed
Modern bankruptcy laws:
1800 - first law in the USA
1864 - revised because of the civil war
1867 - law included corporations
1978 - major revision and basis of our current laws
Purpose: Bankruptcy is a way our government helps those who have no hope of recovery from their high debt.
The current law includes many chapters (sections of the law).
Two major sections:
Chapter 7 - Liquidation of Assets to Pay Debts
Chapter 11 - Reorganization of Debts
Why do people get into financial trouble?
Poor management of their finances
Over extension of credit
Lawsuits / Judgments
Loss of income source
Biblical Passages on this subject:
Romans 13:7-8 - Owe no man anything
Matthew 18:25-27 - Parable about forgiveness
As Christians, we must do our best to pay our debts and honor our commitments.
There may be situations where this is not possible.
Bankruptcy laws are written to protect the debtor from severe punishment.