Should Saints File Bankruptcy??

[IAmBecauseHeIs]

  I'm not talking about church folk, I mean those of us who are REALLY saved and trying to live this life to the glory of God. I personally have been grappling with the decision to file and/or not to file for years, and now that the President has signed the new bill into law...it has become a burning issue for me again. I am a single parent who over the years have made some VERY BAD financial decisions--some for the right reasons and other just for gain (gotta be honest).

At any rate, I'm now placed in a position where my necessary bills -- those that are crucial to the survival of myself and my son -- have begun to outweigh my source. So much so, that the extra bills don't have a chance. I owe more than I make in a year--and I don't own a home. The more I decide I'm not going to file and I will make an effort to pay the bills I created...the more my spirit keeps coming back to the decision to file. I keep telling myself, I'm saved, I'm supposed to be setting an example, I can't skate on my responsibilites...but my ice melted and now I'm drowning.

[Forum Administrator]

Hello IAmBecauseHeIs. I encourage you to take advantage of the resource information that is on the Deep Waters Resources for Finances page. Your will find information about Crown Financial Ministries (CFM) which is a ministry that is dedicated to teaching God's principles on finances. You will also find information about FICO which has to do with all three credit reports. Sometimes what you think you look like on paper is completely different from what is actually there.

Whether you decide to file for bankruptcy or not, you will need a budget. If you need help setting up a budget, Crown Financial Ministries offers FREE budget counseling services. Call 1-800-722-1976 from 8:30 A.M. to 5:30 P.M. Eastern standard time to speak to a customer service representative, who will give you the name and contact information for a local counselor. For additional information about the budget counseling process, please visit the CFM Budget Counseling resource page. You can also chat live with a budget coach online. Please visit http://www.crown.org/FinancialWisdom/church/BudgetCoach.asp for additional details.

Crown Financial Ministries has also partnered with the Consumer Credit Counsling Service (CCCS) of Atlanta to provide professional debt management counseling to people with multiple creditors and other credit problems. Consumer Credit Counseling Service of Atlanta is a non-profit community service agency and one of the largest and most highly rated credit counseling organizations in the country.

If you are interested in obtaining debt management counseling, you will need to have a source of income, some money in your budget to allow for repayment of your creditors through the debt management plan, and be committed to repaying the debt you owe. The toll-free number that services all of the United States is 1-888-771-HOPE (4673). CCCS of Atlanta offers 24-hours-a-day, seven-days-a-week, 365-days-a-year telephone counseling. The link to the CCCS website is http://www.cccsatl.org

Below is an article about bankruptcy from the Crown Financial Ministries website that I believe will answer your question more directly.

Bankruptcy
October 25, 2004 - by Crown Financial Ministries
 
The term bankruptcy comes from two Latin words and literally means "broken bench."
 
 
Increase in bankruptcy
The term bankruptcy comes from two Latin words meaning "bench" and "break"; thus, its literal meaning is "broken bench."

Under Roman law, after gathering together and dividing up the assets of a delinquent debtor, the creditor would break the debtor's workbench as a punishment and a warning to other indebted tradesmen. In addition, these people were generally deprived of their civil rights.

In our society today, revisions to the bankruptcy laws and changes in consumer attitude toward bankruptcy seem to have fostered a climate in which people regard bankruptcy as a more plausible remedy for financial problems than they once did. Recent statistics that show a marked increase in the number of personal bankruptcies seem to support this assumption.

Samuel J. Gerano, executive director of the American Bankruptcy Institute, said the dramatic increase in consumer filings could be primarily attributed to three variables: (1) sustained levels of household debt; (2) household budgets so overextended that it seems impossible to get out from under debt; and (3) the decrease in bankruptcy's negative stigma and the abundance of credit which makes bankruptcy an attractive option.

Biblical principles regarding bankruptcy
Psalm 37:21 says, "The wicked borrows and does not pay back, but the righteous is gracious and gives." A debtor needs to make a commitment to pay back whatever he or she has borrowed, regardless of circumstances or how long it takes.

Solomon said, "It is better that you should not vow than that you should vow and not pay" (Ecclesiastes 5:5). God is a faithful God, but His Word is very clear: A debtor is obligated to repay what he or she has borrowed.

Rather than the first option, bankruptcy should be considered a last alternative. Debtors first need to try to work with creditors and be willing to make whatever sacrifices necessary to fulfill their promise to repay.

If an individual borrows money with an agreement to repay, bankruptcy does not negate this agreement scripturally. This doesn't mean that a debtor in a hopeless situation cannot file bankruptcy; however, every other possible option should be tried before filing for bankruptcy.

These options might include selling home, car, or any major assets; liquidating any retirement funds; seeking loans or gifts from friends, extended family, and/or church family; taking on additional jobs; postponing further schooling in order to work full time; and working with a credit counseling service.

If all other options have been exhausted and there is still a need to file bankruptcy, there are two things to which a debtor must commit before filing. First, a debtor must be willing to accept the absolute requirement to live on a conservative budget and pay the debts back. In some cases, this may take an entire lifetime.

Second, the debtor's motive must be honorable, according to Scripture. If the bankruptcy action is being taken to protect the legitimate rights of the creditors, the action is biblically acceptable. However, if the motive is to protect the assets of the debtor, without due consideration of the creditors, the action is unscriptural. "Do not withhold good from those to whom it is due, when it is in your power to do it. Do not say to your neighbor, 'Go, and come back, and tomorrow I will give it,' when you have it with you" (Proverbs 3:27-28).

Conclusion
God's Word makes is clear that a vow (promise) of any kind is not to be taken lightly. Once someone has given his or her word, it becomes a binding contract. So, before agreeing to any terms, it is assumed that an individual has carefully considered the consequences.

For the current generation, this concept seems to be rarely taught and seldom applied. A vow to pay a creditor is usually deemed something made under one set of circumstances and broken under another, or it is ignored when the purchased product loses its usefulness. However, God's Word says that debtors are to be held accountable.

Although our nation's legal system may discharge debts through a bankruptcy process, God's people should still repay their debts in full, even after a bankruptcy.

This can be a powerful witness to a world that is cynical about Christianity making any practical difference in a person's life. As believers, we are held to a higher standard than merely what is legal.


You can also find information on the types of bankruptcy here: http://www.crown.org/Library/ViewArticle.aspx?ArticleId=577. You may also find the article Hope in the Midst of Hopelessness encouraging.

I trust this information will prove helpful to you. Help is available!  You can still be an example even through this. God will make everything--even financial difficulty--work together for your good if you are committed to doing things His way.

[IAmBecauseHeIs]

Thank you doesn't adequately intimate how grateful I am.