Many individuals experiencing debt problems have deep moral or religious concerns regarding filing for bankruptcy. Consolation may be found in understanding a good deal of our modern bankruptcy laws evolved directly from the teachings of the bible.
The “seven year rule” respecting the discharge of debts stems from the “Lord’s Release” in the bible. In Deuteronomy, it was mandated that debts be forgiven every seven years, regardless of a person’s circumstances. Deuteronomy 15: 1-3 (“At the end of every seven years you shall grant a release. And this is the manner of the release: every creditor shall release what he has lent to his neighbor or his brother, because the Lord’s release has been proclaimed”.).
Congress codified this biblical provision in the Bankruptcy Act of 1938 whereupon an individual could receive a discharge under Chapter 7 bankruptcy once every seven years. It has been changed twice since and is now eight years. Congress actually chose the number “7” to assign to “Chapter 7” of the Bankruptcy Code out of respect for the biblical precepts.
The seven year rule is again proclaimed in Exodus 21:2. The Old Testament also made provisions for debt forgiveness as the year of Jubilee wherein debts were to be forgiven every 50 years. Leviticus 25:10-13.
The New Testament reinforces the principles of debt forgiveness. The Lord’s Prayer as taught by Matthew provides that we seek to “Forgive our debts, as we forgive our debtors.” Mathew, 6:12. The importance of debt forgiveness is reinforced in Mathew 18: 21-35. Jesus promoted debt forgiveness when he punished the “money changers” (lenders) by removing them from God’s temple. John 2:14-21. Jesus also said that for those who lend and expect nothing in return, their “reward shall be great.” Luke, 6:34-35.
In bankruptcy, we have codified exemptions to prevent certain assets from being seized by creditors. Many of these modern exemptions also stem from the Bible. For instance, we have exemptions for: 1) necessary wearing apparel. Exodus, 22:26-27; Deuteronomy, 24:10-13; 2) tools of the trade. Deuteronomy 24:6; and 3) wages earned, but not yet paid. Deuteronomy 24:14-15, 17; Leviticus, 19:13.
Finally, the Bible is replete with provisions showing compassion for debtors and admonishing heavy handed tactics from creditors. Deuteronomy, 15:7-10 (If a man is poor, do not be hardhearted or tightfisted toward him.); Psalm 15:5 (A righteous man lends money without “usury” – the charging of interest on a debt.); Deuteronomy 23:19 (“Thou shall not lend upon usury to thy brother.”); Nehemiah 5:3-13 (pursuing relief from enforcement of mortgages on the homes and possessions of the Jews); Exodus, 22:25, Ezekiel, 18:13, 22:12, Leviticus, 25:35-36, Psalm: 15:5 (condemning the practice of usury).
In some form or another, all major religions, including Christianity, Judaism, Hinduism and Islam prohibit usury by lenders while promoting compassion for debtors. Similarly, all religions value family preservation far more than repayment of debts.
If you are confronting a moral dilemma with the prospects of seeking relief from your debts through bankruptcy, you may find great solace in the Bible or through prayer. A trusted minister or spiritual advisor is often a great source to turn to for a second opinion. The positive reinforcement can be truly uplifting.
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