Most people who file bankruptcy do not have to do so simply because they lived beyond their means, there is usually a loss of income, a medical issue that has occurred, or a minor default on one credit card. Once such a default gets reported to the credit reporting agencies, it causes a snowball effect that all other credit cards and lines of credit skyrocket your interest rate in excess of 20% so that your monthly minimum payments become unmanageable. But most debtors, even after experiencing these types of unexpected, and oftentimes uncontrollable, set-backs, cannot reconcile filing bankruptcy with their moral and religious beliefs.
It’s my belief that the foundation of all spirituality, whether manifested in religion or otherwise, is repentance and forgiveness. To this end, I often find myself helping clients forgive themselves for getting into a situation where bankruptcy is their way out. I have no magical advice in this regard, it is very fact specific to a person’s situation, but the key is that you must forgive yourself in order to give yourself the permission you are looking for from your soul, to file bankruptcy.
In the Bible, bankruptcy is not specifically addressed as it is a concept developed by man and not God. However, there are parallels to the bankruptcy system in various religious doctrines.
The wicked borrows and does not pay back, but the righteous is gracious and gives.
It is better that you should not vow than that you should vow and not pay.
“At the end of every seven years you shall grant a release. And this is the manner of the release: every creditor shall release what he has lent to his neighbor. He shall not exact it of his neighbor, his brother, because the Lord’s release has been proclaimed.”
It may seem at first blush that the above quotes only serve to strengthen the point that bankruptcy is contrary to religion. However, borrowers must remember that when you borrow or “vow”, you must do so with the intention to pay back. But under Deuteronomy, once you’ve had a debt for 7 years that isn’t paid back, you should be entitled to a “release”. Such release is received through bankruptcy.
If you are in financial trouble, you must start by forgiving yourself for the position you are in, then avail yourself of the legal system that exists to help you through these times and thereafter repent by supporting financial literacy efforts in your local community and by giving back to non-profit organizations that support financial literacy. You can help fund and support programs that will allow future generations to have more education to make better financial decisions because the fact of the matter is, many bankruptcies occur simply because individuals live beyond their means and make poor financial decisions. In this light, you may not be paying your creditors back directly, but you will be paying them back by helping to provide them with a more educated consumer who hopefully will not make decisions that lead them into bankruptcy and increasing the loss to creditors on future discharges of debt.
Tiffany Franc is an attorney in PK Law’s Corporate and Business Services Group. She provides Chapter 7 and Chapter 13 legal advice and representation to individuals, and advice on bankruptcy alternatives, including debt restructuring and rehabilitation, to consumers facing debt collection, garnishment, liens and foreclosure and is trained in handling short sales and mortgage loan modifications. Ms. Franc can also assist businesses and individuals with navigating bankruptcy as a creditor.
In addition, Mrs. Franc represents clients in adoption proceedings (adult, step-parent, 2nd parent, interstate (ICPC) and finalizations in MD of out-of-state or out-of-country placements), child custody/access and child support matters, absolute and limited divorce hearings, prenuptial agreements and settlement negotiations in family law matters.
Tiffany can be reached at 410-832-5450 or email@example.com.