Is it a sin for a Christian to file bankruptcy?

by Dan Nunley

As an ordained minister and Christian attorney who has primarily practiced bankruptcy law for the past 13 years, I am often asked if it is acceptable for Christians to file bankruptcy.

While the consideration of filing bankruptcy is difficult for the vast majority of people, it presents a serious spiritual struggle for Christians. Most Christians feel that they have failed God by being poor stewards of the financial resources He has given them. Most struggle with feelings of guilt regarding creditors who will not be paid. Some believe that the Bible condemns bankruptcy.

Bankruptcy contemplates the “forgiveness” of debt. The Bible, likewise, contains debt forgiveness laws. Under U.S. law, a debtor may only receive a discharge of debts in a Chapter 7 bankruptcy once every eight (8) years.   Under Biblical law, the release of debts came at the end of seven (7) years.

Christian attorneys Matthew Tozer and Ben Lofstedt have written an article titled “Is Bankruptcy Scriptural?” They begin with the premise that bankruptcy laws contemplate the “forgiveness” of debt and that the Bible also contains debt forgiveness laws:

“At the end of every seven years you shall grant a release of debts. And this is the form of the release: Every creditor who has lent anything to his neighbor shall release it; he shall not require it of his neighbor or his brother, because it is called the LORD’s release.” Deuteronomy 15:1-2 (NKJV).

The authors go on to discuss a number of Old Testament and New Testament verses that discuss the concepts of sin, mercy, forgiveness and equity.

Their ultimate conclusion, and one with which I agree, is that it is not a sin for a Christian to file bankruptcy. However, a Christian’s decision as to whether or not to file bankruptcy should only be made after spending much time in prayer seeking wisdom and direction from God and then seeking legal advice from an attorney with extensive knowledge of the bankruptcy laws.

As a Christian attorney and ordained minister, I am sensitive to the spiritual struggles Christians experience when contemplating filing bankruptcy. If you have serious debt problems and would like to discuss how bankruptcy may be able to help, contact me today by phone or email to schedule a FREE initial consultation. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

{ 7 comments… read them below or add one }

Allison Clark September 6, 2009 at 8:14 pm

I am currently helping my Uncle with his past financial debt. He has totally turned his life around the past three years as a result of receiving Christ. The Lord healed him instantly of smoking for 35 yrs, healed him physically, mentally and emotionally from, near death, depresseion and thoughts of suicide. The Lord had also touched him and brought him under discipline and accountability with his finances the 3 yrs. He has about 20K debt from his past and is currently having his wages of $364 a week garnished by 25% from one Creditor. He is now behind on his rent and utilities and cannot continue paying off his past creditors. He has shown that he can be accountable and disciplined with his finances but because of health issues not able to work a second job. Can you give us advice about filing Chapter 7 in Tulsa OK? We would also like a name of trustworthy bankrucy attorney in Tulsa, OK. Thank you for your words of Chap 7 and Christians, it was very helpful. Blessings, Allison Clark

Dan Nunley September 6, 2009 at 10:10 pm

Allison,

I will contact you by email to discuss your situation.

Dan Nunley

Joshua January 28, 2010 at 4:27 pm

Hello,

Thank you for your words on Christians and bankruptcy. I currently have about $25,000 of debt. I haven’t made any new debt in over 2 years and have been trying very hard to get out of debt! I believed this was the Christian thing to do — a righteous man pays back what he owes. But the points you brought up are very enlightening. I just had my checking and savings accounts frozen! That was food money and gas. I have also been working with a debt settlement company for over a year but they haven’t settled anything for me. I have no assets at all. No house, no car, no computer. I’ve been living off very little trying to get out of slavery. What do you suggest I do? Please help.

Thank you,
Joshua

Dan Nunley January 28, 2010 at 11:49 pm

Joshua,

It sounds like you are serious about no longer being a slave to debt. Congratulations on living frugally and not incurring any new debt over the past two years. I would suggest that you seek advice from a knowledgeable bankruptcy attorney near you. He or she can discuss options available to you, including bankruptcy and alternatives to bankruptcy. A good way to find such a lawyer is to use the Attorney Finder provided by the National Association of Consumer Bankruptcy Attorneys. I wish you well.

Dan Nunley

Dale December 25, 2011 at 2:48 pm

Well, if the scriptures are God-breathed, and they ARE, then no society has any right to set aside the mercies that God gave even under the Old Law Covenant. Under the New Covenant, the exercise of Mercy is to be even vastly more extensive than under the Old. Yet people here are not granted a release of debts automatically every 7 years. No, they must apply for this, and only once every 8 years. Our nations lawmakers, many of whom claim to be Christian (Catholic or Protestant), are making laws that are far more tough on debtors than God was, even under the much sterner Old Testament Law. That is not right. They have no GOD-given right to do that. Debt release, in “Christian” America, should be automatic, every 7 years, period. For everyone. Of course, that would drive the trillionaire banking elites crazy, but it would be harmonious with the Word of God.

Genevieve February 29, 2012 at 11:01 am

Hello Mr. Nunley,

I have searched through your blog and have found your information very helpful when dealing with my own attorney and the expectations of what certain decisions will have on my financial future. Thank you for providing clear and concise advice. I am currently in the process of filing a Chapter 7 Bankruptcy in New Mexico. I have prayed on my financial situation to overcome the emotional guilt and inadequacy of being unable to provide for my family financially. I am single mother of 3 children and have not received any parental or financial support from my ex-husband in these past 8 years. The majority of the debt that has led me to file for this bankruptcy came from our marriage. Do you know where one can find classes based on Christian principles for financial planning after the discharge of a bankruptcy? Thank you for taking the time to address this question.

~Genevieve

Dan Nunley February 29, 2012 at 11:12 am

Genevieve,

I would recommend that you search for a church or other organization in your local area that offers a financial class produced by either Crown Financial Ministries or Dave Ramsey. I wish you well.

Dan Nunley

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