Bankruptcy And Religion

Bankruptcy and religion, two concepts that you probably think are at odds with one another.  Not so.  Many people think of bankruptcy as an “immoral” act, and that clearing debts would somehow make them “bad” people. The truth is, though, bankruptcy is deeply rooted in this country’s most prevalent religions.

Deuteronomy laid the foundation for bankruptcy by ordering lenders to release borrowers from their debts every seven years. Likewise, the Koran provides instruction on the practices of usury, including the forgiveness of debt.

The Bible and the Koran both illustrate the dangers of money. For the agrarian and nomadic people of the Bible and the Koran, buying and trading was essential to support families and maintain community. Lenders who charged interest to herders, farmers, and merchants often used all of a family’s possessions as collateral, so when crops failed or trade routes closed, families often lost everything they had. This not only created hardship; it promoted exploitation, deprivation, and bondage.

In modern society, we are similarly compromised. Just about anyone can get a credit card today, and predatory lending practices make it easy for us to buy more expensive houses than we can afford.

Fortunately, the principles of debt forgiveness laid out in the Bible and the Koran still apply today in the form of Uniform Bankruptcy Laws. Bankruptcy isn’t an “immoral” act – it’s an opportunity to “start over” that is rooted in thousands of years of history.