The Short Answer
The Bible does not explicitly forbid or endorse bankruptcy, but it does speak directly to the reality of debt and the inability to repay it. Verses like Deuteronomy 15:1-2 describe a divinely sanctioned release of debts every seven years — a concept that closely mirrors what bankruptcy does today. Most Christians considering bankruptcy are not walking away from debts they chose to ignore; they're responding to a genuine financial crisis that was often beyond their control. Filing bankruptcy is a legal and, many would argue, biblically consistent way to find relief from an unmanageable debt burden and start over.
One dilemma that Christians face as they contemplate how to handle their financial difficulties is: “What does the Bible say about finances and debt?” This can be a difficult question to find accurate answers to. Although Bible verses can be interpreted in many ways, we will review Bible verses that discuss this topic to allow you to prayerfully make the best decision for you and your family. As always, you should consult with your pastor regarding more specific questions regarding the Bible and debt.
As anyone with debt and financial hardship knows, debt does not discriminate among races, religion, or gender. Financial hardship can happen to anyone, and it is a very emotional, personal decision to decide to file bankruptcy.
A common concern that Christians who are considering bankruptcy have is whether bankruptcy is considered a sin and whether they will be committing a sin by not repaying their debts.
As many people know, the Bible does speak frequently of debt and how we should handle our debts. Although the Bible does not expressly forbid or approve of going into debt, there are several instances where the Bible gives guidance on how debt should be viewed.
One emphasis that is made in the Bible is how debt can make you a slave to the money owed. Jesus died to free us from slavery to our sins, yet debt can keep us in the grip of the money owed for years – making us a slave to the debt.
In Ecclesiastes 5:5, the Bible says, “It is better to say nothing than make a promise and not keep it.” This verse can be construed to mean that one should not incur debt with the promise of repaying the debt only to later not be able to keep that promise. On the other hand, most people do not intentionally incur debt with the intent of not repaying the debt. Most individuals who have incurred debt and are contemplating bankruptcy were at one point in time able to pay all of their bills, including their credit card debts. Usually, people are considering bankruptcy because of a financial crisis that has affected their income and expenses.
Taxes owed are viewed as a category of debt that must be repaid. In Romans 13:7, the Bible says, “Give to everyone what you owe them: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor.” In today’s modern bankruptcy laws, most taxes are not dischargeable, meaning they must be repaid regardless of the bankruptcy filing – thus keeping with the views of the Bible on the repayment of taxes.
As you can see from the above verses and analyses, the Bible does not explicitly forbid or encourage debt. With no clear answer on how the Bible views debt, how can one decide how the Bible views bankruptcy?
Once again, the Bible does not give a clear statement on whether bankruptcy is a sin. However, there are several verses in the Bible that do refer to one’s inability to pay their debts.
In Luke 7:42, the Bible says, “When they were unable to repay, he graciously forgave them both. So which of them will love him more?” In Romans 13:8, the Bible says, “Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law.”
One of the more popular verses on this subject is found in Deuteronomy 15:1-2, where the Bible says, “At the end of every seven years you shall grant a release of debts. And this is the form of the release: Every creditor who has lent anything to his neighbor shall release it; he shall not require it of his neighbor or his brother, because it is called the Lord’s release.” This verse is probably the most relevant to the concept of bankruptcy and the “release” of debts that takes place when a person receives their discharge from bankruptcy.
Although the Bible is indeed conflicted regarding debt and the inability to repay debts, there is good news for Christians who are contemplating bankruptcy. The Bible encourages people to not be a slave to their debts, and calls for the release of debts after certain time periods. The Bible is certainly not opposed to the concept of bankruptcy, and bankruptcy is not considered to be a sin.
However, this does not make bankruptcy any easier for a family who is exploring their options and considering filing bankruptcy due to their financial situation. As with any major life decision, it is one that should be prayed over, discussed with loved ones, and considered carefully. If you do decide to file bankruptcy, you will find that you will be blessed with a fresh financial start so that you can continue with your life without being a slave to the debt.
Key Takeaways
- The Bible does not explicitly call bankruptcy a sin, and no single verse directly forbids seeking legal debt relief.
- Deuteronomy 15:1-2 describes a mandated release of debts every seven years, which closely parallels the debt discharge available through bankruptcy today.
- The Bible warns against being enslaved to debt, and bankruptcy can be the very tool that breaks that cycle for families in genuine crisis.
- Luke 7:42 acknowledges that some debts simply cannot be repaid, and responds with grace — not condemnation.
- Most people facing bankruptcy did not borrow with the intention of not repaying; a job loss, medical crisis, or divorce typically triggered the hardship.
- Consulting both your pastor and a bankruptcy attorney can help you make a decision that aligns with your faith and your financial reality.
Attorney Insight
The question I hear most often from clients who are people of faith isn't "can I file?" — it's "should I file?" They've carried enormous guilt for years, convinced that struggling with debt is a moral failure rather than a financial one. What I tell them is this: in nearly 30 years of practice, I've never met someone who borrowed money planning to walk away from it. The circumstances that bring someone to my office — a layoff, a medical emergency, a divorce — are the same circumstances that most people of faith would recognize as hardship beyond one's control, not a character flaw.
