Should Christians Declare Bankruptcy?

Jason Cabler

You won’t go to Hell for filing bankruptcy, let’s just go ahead and get that off the table first.

Now, with that said, I want to address a question I’ve been asked many times, thus the title of the post.

When it comes to being in debt, some situations are much worse than others.  Most households in America have at least some debt.  However, some households have so much debt they feel there’s absolutely no way they can ever climb out, that’s when thoughts start turning to bankruptcy.

Whether you just got crazy and ran up a ton of consumer debt or you have huge medical bills, when your financial situation turns desperate, bankruptcy can seem like the easiest solution to an extremely difficult problem.  When your situation is this difficult, it’s easy to seek advice from people such as bankruptcy attorneys and other professionals that have a vested interest in you filing for bankruptcy and may not have your best interests at heart.

But before you seriously consider filing, let’s take a close look at some things you should consider before you take that step.

What Does the Bible Say About Bankruptcy?

Although the Bible doesn’t directly address bankruptcy specifically, it does warn against not paying back debts. A couple of examples are Psalms 37:21:

“The wicked borrows and doesn’t pay back, the righteous is gracious and gives”

And Ecclesiastes 5:5:

“Better you should not vow, than vow and not pay.”

And there are other verses that reflect those sentiments as well.  So to put it bluntly, God doesn’t like it too much when you don’t pay off your debts, and if you’re a Christian, obviously you want to be in good standing with God (Life tends to be so much easier that way).

Pray About It

Therefore, when you get into a tough financial bind, begin going to God with it and pray for His direction and favor over your situation.  He can direct you toward a solution that you can’t see for yourself if you’re not trusting in Him.

Putting your trust in Him to guide you through your situation and begin doing things His way will catch His attention.  Doing things your way is usually how you got into a bad debt situation to begin with, so giving it over to Him will definitely bring favor in that situation.

He can make a way for you where there is no way, and He will always bless you for doing the right thing.

Educate Yourself About Debt

Read what the Bible says about debt and how to handle money (I’ve listed some verses at the bottom of the post to get you started).

You should also read books and even take courses about how to get out of debt and use money wisely.  Of course my “Celebrating Financial Freedom” self study course is a great place to start learning to see money and debt differently and begin the process of getting out of debt.  I also recommend Financial Peace and The Total Money Makeover by Dave Ramsey.  The more educated you become about your money, the wiser decisions you tend to make.

Get Good Advice About Your Debt

Get advice from the right people.  Seeking advice about debt from a bankruptcy attorney or a debt consolidation company are usually not a good idea because they have a vested interest in profiting from your situation.  Find someone you know that handles their money well, especially someone who is out of debt, and ask their advice.  Many churches, especially larger ones, even have financial counselors available on staff that can help lead you in the right direction.

Find a Way to Avoid Bankruptcy

Working your way out of a tough financial situation requires time, effort, and most of all, changes in behavior.

If you declare bankruptcy, there is nothing in that process that changes the habits that got you there in the first place.  However, learning to budget, creating extra income, and doing everything humanly possible to pay off those debts ensures that you create new behaviors that will carry you forward and allow you to NEVER return to that situation again.

Bankruptcy is a very emotional process equivalent to experiencing a divorce or the death of a loved one, and is truly a last resort financially.  It’s really necessary only a very small percentage of the time.  But if you are a believer and you do decide to go that route, remember to trust your creator, and remember that He is a loving and forgiving God.

He will see you through any situation no matter how bleak, giving you a hope and a future as long as you put your trust and belief in Him.

Recommended verses: Proverbs 21:12Proverbs 22:7Proverbs 27:23Psalms 20:4Proverbs 22:26-27

Article originally published on Celebrating Financial Freedom. Used with permission.

Dr. Jason Cabler is a Christian personal finance blogger, author, and speaker.  He teaches how to get out of debt and live a debt free lifestyle through his Celebrating Financial Freedom blog and self study course.  His new book How to Budget- The Quick and Easy Guide to Making a Budget That Works is now available.  He can be reached for interviews or  speaking engagements by email ( and can be found on Twitter, Facebook, and Google +.

Publication date: November 30, 2012