With many people still struggling to find work, bankruptcy filings continue to grow.  More than 500,000 people have filed so far this year, according to the National Bankruptcy Research Center.  That's up 17 percent from last year at this time.

While bankruptcy's stigma has weakened in recent years, it is still an especially troubling topic for many Christians. What about the biblical admonition, "The wicked borrow and do not repay, but the righteous give generously" (Psalms 37)? Does that make a person who has filed for bankruptcy, or who is considering filing, a "wicked" person? No. While bankruptcy should be viewed as an absolute last resort, it is a viable option—even for a follower of Christ.

Three Important Questions

Consider the following questions to help determine whether bankruptcy may be appropriate for you.

Is there no other choice? The Bible teaches that we have a responsibility to provide for our families: "If anyone does not provide for his relatives, and especially for his immediate family, he has denied the faith and is worse than an unbeliever" (1 Timothy 5:8). This includes cases where family is just you. If you have prayed for God's help with your finances, pared your budget down to the absolute essentials, sought help from family and friends, and negotiated with your creditors in good faith, only to have them play hardball by garnishing your wages or by suing you, making it impossible for you to take care of your family's needs, bankruptcy may be necessary.

Have you taken responsibility for your debts? You may have gone through some difficult circumstances that led to your debts—a divorce, the death of a spouse, medical problems, an extended time of unemployment. Still, chances are you can identify something you could have done to avoid the problems you now face, or at least to make them less severe. This isn't about adding insult to injury. It's about owning up to your part in the problem. What could you have done differently? 

Have you taken steps to avoid debt problems in the future? If you weren't using a budget to manage your spending prior to getting into debt, you absolutely need to be using one now. If any of your debts are credit card debts, you need to commit to not using your cards, at least for the foreseeable future. You also need an accountability partner that you meet with on a monthly basis to review your finances.  I would never counsel someone to file for bankruptcy without these steps in place.

Bankruptcy Alone Won't Solve Your Problems

If you haven't made any significant changes in how you manage money, filing for bankruptcy may turn out to be nothing more than a short-term solution.  All too often, that's exactly what happens.  According to the Consumer Bankruptcy Project, a Harvard University-based research group that has studied bankruptcy for twenty years, only half of all bankruptcy filers said their financial situation had improved a year after filing. As described in a Smart Money article, for 35 percent, their financial situation remained the same, and 15 percent said their situation had actually gotten worse.

Don't Ruin a Relationship

There is one type of creditor whom you should make every effort to repay: friends or family members who have loaned you money. By law, you are required to list all of your liabilities when you file for bankruptcy, so individual creditors may receive at least partial repayment through the formal bankruptcy process. However, it's unlikely that they would end up receiving the full amount that you owe, so you should repay whatever portion of the loan they do not recover, even if that means paying a small amount each month over a long period of time. Otherwise, your relationship with the person is likely to suffer.

Accepting God's Forgiveness

Even if you realize that bankruptcy is your only option, you may still feel hesitant. Perhaps you feel embarrassed or guilty. If so, may I remind you that Scripture contains numerous examples where God forgave people of far worse behavior than taking on more debt than they could handle. For instance, Jesus forgave prostitutes (Luke 7:36-50), extortionists (Matthew 9:9-13), thieves (Luke 23:26-43), adulterers (John 8:1-11), and murderers (Acts 9).

Many biblical money management teachers say that Christians who file for bankruptcy should still pay back what is owed, even if it takes the rest of their lives. For a long time, that's what I believed.  However, during the process of writing Money Strategies for Tough Times, that teaching just didn't sit right with me.  As I thought about it and sought God's guidance, what kept coming to mind was the fact that Jesus didn't say to those he forgave, "Go now, leave your life of sin, and show up every Saturday to sweep the temple for the next twenty years." He gave them a fresh start. Likewise bankruptcy offers a fresh start for those who need one most, have owned up to their role in their financial problems, and have taken steps to avoid trouble in the future.

Matt Bell is the author of two books published by NavPress: "Money, Purpose, Joy" (September 2008) and "Money Strategies for Tough Times" (April 2009).  He speaks at churches, conferences, universities, and other venues throughout the country.  To learn more about his work and read his blog, go t www.mattaboutmoney.com