the christian and bankruptcy

Written by Mark Lafler

B.A., Global University; M.C.S., Regent College I am currently serving as a youth minister at our church in Sarasota, FL. I am married to Tera (15 Years +) and we have 3 beautiful daughters.

August 26, 2011

I was driving in the car on a Saturday afternoon a while back and heard one of those short ministry talks on the local Christian radio station.  You know the ones that take about a minute or two.  They tell a little story and then go straight to a thought-provoking point.

It was suggested that with all the people filing for bankruptcy or looking to short-sell their homes (among other financial distresses) Christians should set a higher standard and take a higher road.   In other words, although Christians may need to file for bankruptcy they should still look to pay their debts once they have re-gained better financial position.

For instance, if one files bankruptcy and no longer legally has to re-pay their debts (i.e. $30,000 in credit card debt) they should try to pay that back because of the Biblical standard (Romans 13:8) and the over-all duty of Christians to love and do what is right.

The radio host went on to suggest that people who short-sell their homes are breaking their contracts.

It is one story if someone is unable to pay their debts and the bank agrees to short-sell the home because it is better than foreclosure.  If the lender out-right forgives the person’s debt then of course that is fine (and praise God for lenders who forgive debt from time to time).

It is another story for someone to short-sell the home because they borrowed $300,000 to buy the home and now the home is only worth $150,000.  The borrower only wants to get out of the contract because the value dropped and it may take a decade to recover.

What if the bank did the same thing in reverse?  If the borrower was given $300,000 for the home and the home sky-rockets to $450,000 would the bank have the right to break the contract and buy out the remaining balance to profit on the equity? – Of course not.  However, it seems the borrower is doing just this – leaving the bank with a great loss.

Last week I targeted the greed in the corporate world.  But we should understand that there is greed present in the consumer world as well.

The radio spot was provocative and challenging.

Although people who file for a full bankruptcy legally do not have to pay back most (if not all) of their debts, Christians should follow a higher set of guidelines and standards.

If you are considering bankruptcy are you hoping that in the future you will pay back that debt when you become financially stable?

What do you think?

Should one pay back their debts even if they do not legally have to pay them back?


  1. Andy Carlson

    Right on, pay the debt……and if those to whom you owe the debt no longer exist….sew an equal amount into the Kingdom in some way….Wouldn’t be great of the practice of the “year of jubilee” still existed……

    • Mark Lafler

      Thank you for sharing as always, Andy.

    • Mark Lafler

      That is so right.  As always, thanks for your comments!

  2. Dan Moyle

    Thought provoking indeed. Paying debt (or forgiving) even when we’re not “supposed to” in a secular world. I like the idea.

    • Mark Lafler

      It is very challenging and counter-cultural.

      Thanks for the comments.

  3. Anonymous

    Nice concept, but in reality, I doubt there are going to be many people who are going to have an extra $150k laying around after they get on stable financial footing. It’s just not realistic. And now it’s just gonna be one more thing to feel guilty about….

    I grew up in a theological system that sounds a lot like this. Christ paid a debt for us in full, one we can never repay, yet the saved person feels obligated to keep the law now, out of love and gratitude for what Christ has done. No, I don’t think so.
    It is for freedom that Christ set us free. And it is for being debt-free that you were relieved of your debt. Now live for Him. Now be a good steward and give generously for the Kingdom, in His name.

  4. Amy the Bookish

    Apparently, no one here has *ever* been through bankruptcy, so let me tell you a little bit about how it goes.  One day you get sick, really sick, so sick you can’t work.  So, you take cash advances on your credit card and use the overdraft protection on your bank account to pay bills and buy food.  You do it the next month and the next month because there is rent, car insurance, and as soon as you get better, as soon as you can work…you’ll be OK.

    But you don’t get better and the bills keep mounting.

    And mounting.

    You call a credit counseling group and sob when he tells you that there is no way you can get out of this debt and you must declare bankruptcy.  You simply do not bring enough money in each month to pay your bills.  This is horrible news.  You’ve been through rough times, very rough times…but, bankruptcy?!!?!  Really?!!?

    So you take a belt (you don’t even wear belt, but you have this one) and you put it around your neck, pull as hard as you can, and think about how to do “it.”   You just don’t have the heart to do “it.” You take the belt off, go into the living room and tell your best friend/roommate that you must file for bankruptcy.

    You meet with a lawyer, and you can’t even PAY for your bankruptcy, so your best friend does it.

    While the paperwork is filed, you screen call after call from bill collectors and rationally try to explain that you are in the process of declaring bankruptcy.  They don’t care and  threaten you anyway.

    Finally, the day arrives and you go to court.  You wait in a room with a bunch of other people declaring bankruptcy.  The magistrate calls you forward, asks you a few questions, and seems genuinely sad for you.  You leave and a few months later you receive a notice in the mail that your bankruptcy is discharged.

    On that day, you understand God’s grace more than you ever did growing up in church.  You understand what it is to TRULY be forgiven.  It is a debt you could NEVER repay and you are grateful that you don’t have to repay it because you cannot.

    Even to this day, you cannot.  Yet you learned a lesson about grace. 


    • @bibledude

      this is a really great perspective on bankruptcy and experiencing the grace of God! i can totally understand and relate to the experience you’ve shared here, and i’m glad that you did share it. 

      the big thing that i take away from all of this is that it’s important for us to be able to receive that grace. but i also see the importance of being wise stewards as best as we can. 
      this is a good conversation to be having! i really appreciate the honest and open responses! thanks again for sharing!

      • Amy the Bookish

        The thing is, I was trying to be a wise steward!  I was TRYING to pay my bills.

        What is a gal with no insurance who gets life-changing illness to do? 

        Here is one thing I have taken away from the Mennonites & Amish.  They don’t have health care, but when one of the members of the community has a need, they all come together–from other towns and other states–to help that member. 

        Too bad the Church doesn’t do that more–for individuals.  It got back to someone at my old church about my illness and financial problems, and she spread it all around to that church AND other churches.  Not once did anyone come forward and ask how I was, ask how they could help, or even give me a call to say they were praying for me. Before I got sick and moved 45 minutes away, I was an active member of this church.  I had just completed my Master’s degree….and a month into my new job, I couldn’t work anymore.

         The assumption is that EVERYONE who files for bankruptcy is a terrible steward of money or needs financial management classes.  But that’s not true.  I just didn’t have enough money to pay my bills–the rent for my apartment, for food, for medicine–and I couldn’t make it.

        • @bibledude

          oh… please don’t take my statement that everyone who has gone through bankruptcy as meaning they are all bad stewards. i’m just saying that we should take every effort to avoid these situations… but i know that sometimes unavoidable stuff happens.

          and i TOTALLY agree on the church/health care thing… i actually wrote a post about that a while back…. definitely would love to see the church act more like the community that we were called to be. the kind of community that looks different to the rest of the world and makes them say… “wow, how cool is that? they REALLY take care of each other!”

        • Mark Lafler

          I think bankruptcy is a good law to have.  A lot of people have situations like yours and there is no other choice (unless the church did step up to help).

          However, some are careless or refuse to work more.  Bankruptcy is an easy out for some (certainly not in your situation).

          Your response and situation is the reason bankruptcy is a good law.  Nevertheless, there are people (and by people I mean Christians too) who take advantage of this law.

          • Mark Lafler

            I have no idea of the percentage of people who have declared bankruptcy and now are “well off” but just google famous people who have declared bankruptcy. 

            There are also people who purchase things and take vacations who know they will not have to repay the purchase or vacation because of a looming bankruptcy.

            The above is associated with greed, your situation does not.  I hope you have recovered or are recovering quickly and that your financial difficulties will become better.

            May the peace of God be with you.


    • Sheila Seiler Lagrand

      This is a heartbreaking story (and I don’t mean story like “fiction”–I totally sense the truth of what you write here, just to be clear). There is no faithlessness in not doing what you cannot do. When you’ve unexpectedly been robbed of your ability to earn money, you’re unable to pay money. If their was ever a situation that our bankruptcy code was meant to address, yours would be it.

      The individuals I’ve known well enough to know their circumstances who’ve been through a BK didn’t have a crisis in health or in employment. They simply spent more on stuff than they made. A BMW instead of a Toyota. Those kinds of choices.

      I don’t like it that I can be this judgmental, but those kinds of situations don’t feel as valid to me, from my limited perspective, as yours does.

    • Anonymous

      Amy, thank you for sharing your story. 

      I would love to see the Church form a community too, where doctors and nurses and dentists and other professionals give their services at reduced fees to other members of the community. Asking the Body of Christ to come together to pay exorbitant fees is not the ideal answer. We could do so much more if we would live in true community. Anyway, thanks again for sharing your Grace Story. I’ll never forget it!

  5. Amy the Bookish

    I’m sorry.  I didn’t mean to come off so strong.  It’s just that bankruptcy and the Church is always a hot button issue.  There are an awful lot of Christians who make statements about entitlements, bankruptcy, and the rest without thinking that there are people who really NEED this stuff.  They’ll send money to missionaries overseas “for the kingdom” but ignore those in their midst.  I think with my own sickness and bankruptcy and ongoing issues, I am immediately judged.  But if people get to know me and THEN I open up, people might say, “Oh, we don’t mean *you*!!!”  I’m SURE I said the same things they did before I was me.  I’m sure of it.  I know there are starving kids in Africa and people who need clean water, but the lady on a fixed income down the street is having difficulties, too.  When my mom sought “help” from the church deacons when she left her abusive husband, she was told she should sell her car and take the bus to church.  First of all, the bus doesn’t GO to that church.  Second, my mom is disabled so she couldn’t walk to the bus stop 8 blocks away.  Third, they didn’t know if they wanted to help her because they didn’t think she had “biblical grounds” for leaving her husband.  This is a mainline evangelical church, not some backwoods place that doesn’t allow women to cut their hair or wear skirts.  In fact, many would say this is a contemporary, forward-moving church with about 1500 members.  I just want people to understand what it’s like, that some of us are trying to do the best we can with what we’ve got.  And, yes, I still give to God’s Kingdom.

    • Andy Carlson

      Hi Amy….it is good to have honest and transparent opportunities for conversation….with those who are not judgmental, self righteous and lack humility and grace themselves –  all in the name of biblical “correctness”.  Hummm, I wonder of you can adopt the phrase of “biblical correctness” for the same meaning as “political correctness”? Even in a forum such as this it takes time to “know” those with whom are sharing , and recognize the time it takes to become confident of  some sort of “confidential grace” with each other even in this public openness.  Thanks…you have a difficult road….Peace of the Lord be with you….


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the christian and bankruptcy

by Mark Lafler time to read: 2 min