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Can a Christian file for bankruptcy?

Why Bankruptcy?

  1. In medieval times, an unpaid debt resulted in:

  2. Debtors prison

  3. Death

  4. Destroy his trading bench (means of making a living)

  5. In Italian, broken bench = "banca rotta" - this is the origin of the word - bankrupt.

Before the 20th century:

  1. Rules favored the creditor

  2. Rules were very harsh

  3. In England, 1542, under Henry VIII, a debtor could be imprisoned or executed

Modern bankruptcy laws:

  1. 1800 - first law in the USA

  2. 1864 - revised because of the civil war

  3. 1867 - law included corporations

  4. 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.

  1. The current law includes many chapters (sections of the law).

  2. Two major sections:

  3. Chapter 7 - Liquidation of Assets to Pay Debts

  4. Chapter 11 - Reorganization of Debts

Why do people get into financial trouble?

  1. Poor management of their finances

  2. Over extension of credit

  3. Business reversal

  4. Lawsuits / Judgments

  5. Loss of income source

  6. Unexpected death

Biblical Passages on this subject:

  1. Romans 13:7-8 - Owe no man anything

  2. Matthew 18:25-27 - Parable about forgiveness


  1. As Christians, we must do our best to pay our debts and honor our commitments.

  2. There may be situations where this is not possible.

  3. Bankruptcy laws are written to protect the debtor from severe punishment.

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