Does God Want You to Be Bankrupt?
Religious laws related to bankruptcy vary across different faith traditions. Here’s a brief summary of some key principles from Christianity, Judaism, and Islam:
1. Christianity:
– The New Testament encourages generosity, forgiveness, and compassion towards those in debt. It teaches that debts should be repaid when possible (Romans 13:8), but also emphasizes the importance of mercy and forgiveness (Matthew 6:12).
– The concept of debt forgiveness is reflected in the biblical principle of Jubilee, where debts were forgiven and slaves were set free every fifty years (Leviticus 25:10).
– While bankruptcy is not explicitly addressed in Christian scriptures, the overarching principles of mercy and justice guide Christian attitudes towards debt relief and financial assistance for those in need.
2. Judaism:
– The Torah includes laws related to debt forgiveness and economic justice. For example, the Sabbatical Year (Shemitah) occurs every seven years and involves the release of debts (Deuteronomy 15:1-2).
– The Talmud provides additional guidance on debt repayment and forgiveness, including the concept of Prosbul, a legal mechanism to ensure repayment of debts even during the Sabbatical Year.
– Jewish tradition emphasizes the importance of fairness and compassion in financial dealings, as well as communal responsibility to support those in need.
3. Islam:
– Islamic law (Sharia) prohibits the charging or paying of interest (riba) and encourages charitable giving (zakat).
– The Quran and Hadith provide guidance on debt repayment and financial obligations. For example, delaying repayment of debt is allowed if the debtor is in difficulty, and forgiveness of debt is praised as an act of charity (Quran 2:280).
– Islamic finance offers alternatives to conventional banking, such as profit-sharing arrangements and asset-backed financing, which align with Sharia principles and aim to promote economic justice.
In summary, while specific laws and practices related to bankruptcy may vary among religious traditions, overarching principles of compassion, fairness, and responsibility towards debtors are common themes. These principles guide believers in navigating financial challenges and addressing debt-related issues within the context of their faith.
How could anyone believe that it is a sin to file for bankruptcy?
In Ancient Greece, bankruptcy did not exist. If a man owed and he could not pay, he and his wife, children or servants were forced into “debt slavery”, until the creditor was paid via their physical labor. Later a debtor could get a fresh start, but only after giving to his creditors everything he owned except some bare necessities. Then the English established debtor’s prison, the bankrupt was seen as being bonded to his creditors and would be released from jail only if he had assets that did not exceed £20, but if any of their creditors objected, they had to stay inside. Voluntary bankruptcy did not become law in Britain until 1849. But 60 years earlier, in 1789 the United States Constitution gave the power to Congress to legislate “uniform laws on the subject of Bankruptcies”. Congress’ first law was the Bankruptcy Act of 1800, which was involuntarily and only limited to traders. The Bankruptcy Act of 1938 expanded voluntary access to the bankruptcy system, and voluntary petitions were made more attractive to debtors.
The point is that people require help in resolving burdensome debts, many of which were not their fault. Why do I say that ? Because the four most common causes of bankruptcy are medical, unemployment, divorce, or death. None of these were choices for the debtor. Life happened, as it does to all of us. Some of us are more fortunate than others.
When you hear that someone is thinking about filing for bankruptcy, don’t jump to conclusions. The alternative may be a lifetime of buying high-interest vehicles, having wages garnished, and having to borrow high-interest payday loans in order to feed the family. It’s a never-ending cycle.
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*
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