Bankruptcy in many ways is a Christian concept.  American bankruptcy laws have Biblical roots.  The seven-year waiting period between personal bankruptcies that was the law until 2005, for example, is based upon Deuteronomy 15:1-2

At the end of every seven-year period you shall have a relaxation of debts, which shall be observed as follows. Every creditor shall relax his claim on what he has loaned his neighbor; he must not press his neighbor, his kinsman, because a relaxation in honor of the LORD has been proclaimed

and Leviticus 25, which describes the regulations both for a seventh year Sabbath and a fiftieth year of jubilee.

Apologists for the finance industry posing as Christians cite Psalm 37:21: The wicked borrow and do not repay, but the righteous give generously,” and claim Christians are obliged to keep payback promises even when life throws a curve ball, according to an article in Christian Science Monitor, Monday July 3, 2007.  This is a classic example of taking a single passage out of context and twisting it in a way diametrically opposed to the message of the Gospels.

The passage in Deuteronomy is a commandment to cease efforts to collect payments on the principal amount of a debt, rather than an injunction to forgive the entire amount of the debt. Debt collection is equated with other commercial activities tending to accumulate wealth, such as harvesting crops for sale rather than personal consumption.  The Sabbath, whether weekly or every seven years, provides a respite for the debtor and the laborer whose surplus goes to enrich others. The sabbatical provisions of Deuteronomy are more analogous to automatic stay provisions of bankruptcy than to discharge.

When coupled with the very numerous prohibitions against lending money or goods at interest in Deuteronomy, Leviticus, and elsewhere in the Old Testament, and the absolute discharge provisions of the fiftieth year jubilee, the passage certainly provides scriptural support for current personal bankruptcy laws.

Lending money or goods at interest, especially to the poor in one’s own community, garners some of the Hebrew prophets’ most scathing condemnations, for example Ezekiel 18:13 – “Hath given forth upon usury, and hath taken increase: shall he then live? he shall not live: he hath done all these abominations; he shall surely die; his blood shall be upon him.”  There is little doubt that these passages, when written, referred to all interest and not just to interest above some arbitrary threshold of reasonableness. 

>From a biblical perspective, the bankrupt who seeks discharge of debts consisting predominantly of accumulated interest and fees is only seeking relief from the predatory actions of a lender who sinned and is profiting from it.  The debtor who entered into such a loan arrangement in good faith should not feel that his inability to meet the letter of an abusive contract violates his duty as a Christian.

Psalm 37:1 is almost the only passage in the entire Hebrew Scriptures explicitly condemning non repayment of debts. It refers to deliberate attempts to defraud creditors, not to debt incurred with the honest intention of repaying it, and even then, the disapproval is mild compared to that heaped on lenders and their usurious practices elsewhere.

In contrast, Mathew 18:21-35, an explicit teaching of Jesus Christ, likens God to a king who forgives his servant the enormous sum of ten thousand talents, and subsequently has that servant jailed when he attempts to exact a much smaller debt from an underling. The parable concludes Then his lord summoned him and said to him, ‘You wicked servant! I forgave you all that debt because you besought me; and should not you have had mercy on your fellow servant, as I had mercy on you?’ And in anger his lord delivered him to the jailers, till he should pay all his debt. So also my heavenly Father will do to every one of you, if you do not forgive your brother from your heart.”

The corporations responsible for abusive lending practices willingly allow so-called Christian pundits to preach to their flocks a message of unending obligation and religiously-mandated self-sacrifice to atone for the sin of borrowing unwisely.  They are not, to my knowledge, correspondingly willingly to personally shoulder the burden of their improvident lending, but rather take refuge under our far more generous corporate bankruptcy laws. Apparently these hypocrites think Ps 37:1 overrides Mathew 18:25.  If they’re wrong, the Gospel suggests that they’re in for an unpleasant surprise, either in this life or the next.