What Does The Bible Say About Bankruptcy? (Explained)

If you Googled this, we know you’re probably stressed. Maybe the bills are piling up, creditors are calling, or you’re wondering if filing for bankruptcy makes you a failure in God’s eyes.

The truth is the Bible doesn’t mention bankruptcy like we know it today. Legal forms and court filings weren’t a thing back then.

But it’s packed with wisdom about dealing with debt, and finding hope when you’re broke.

In this quick post, we’ll shed some light on what the bible says about bankruptcy in detail.

The Bible Doesn’t Say “Bankruptcy” – But It Does Talk About Debt

First thing’s first: the Bible doesn’t have a direct reference to “bankruptcy.” It doesn’t lay out a specific plan for what happens if someone can’t pay their bills or goes broke.

But debt does come up a lot.

One of the most well-known verses is from Proverbs 22:7:

“The rich rule over the poor, and the borrower is slave to the lender.”

Anyone who’s ever missed a credit card payment knows that trapped feeling. The Bible’s warning here is clear: debt can chain you up, take over and mess with your peace.

It doesn’t say debt is a sin, but it definitely encourages people to avoid it when possible.

Also Read: Is A Repossession Worse Than Bankruptcy?

So, the message isn’t “you’re bad if you have debt.” It’s more like, “be careful – it can take more from you than you think.”

Forgiveness Of Debts Was Built Into God’s Law

God actually built debt forgiveness into ancient law.

Back in Deuteronomy 15, the bible talks about the “Year of Release.”

Every seven years, people in Israel were supposed to forgive debts. If you owed someone money, it was wiped out. Think of it as a clean slate for everyone, no questions asked.

God knows people fall on hard times. He wasn’t about trapping folks in lifelong debt. He made room for grace. Room for breathing again. That’s huge.

And that same grace still shows up all over Scripture.

God’s not in the business of punishment for people who are struggling. He’s all about hope and restoration.

Repayment Is Still Valued

Even with all that said, the Bible also makes it clear that paying back what you owe is a good thing. Take Psalm 37:21:

“The wicked borrow and do not repay, but the righteous give generously.”

So, what’s that mean?

Basically, if you’re in debt and can pay it off, that’s good. It shows integrity and responsibility.

But here’s where balance matters. Sometimes, things get so upside-down like a job loss, medical bills, life stuff, that paying it all back just isn’t realistic.

That’s where bankruptcy comes in, and it doesn’t have to be at odds with the idea of repayment.

A lot of people who file for bankruptcy still want to repay as much as they can. They just need breathing room. And that’s okay. That’s honest. The key is doing what you can, not pretending everything’s fine when it’s clearly not.

Also Read: What To Bring To Bankruptcy Consultation

God Cares About The Poor And Struggling

If you’re walking through a financial mess right now, you need to hear this:

God cares about you.

There’s a verse in Leviticus 25:35 that says,

“If any of your fellow Israelites become poor and are unable to support themselves among you, help them…”

God literally told people to help each other out.

No shaming. No kicking people when they’re down. Just help.

The whole Bible is full of stories where God shows compassion to people in hard spots (financially, emotionally and spiritually). He doesn’t ignore it. He steps in with kindness.

So if you’re facing bankruptcy, you’re not a failure. You’re a human in a tough situation, and God still sees you with love, not disappointment.

Modern Bankruptcy Is A Tool, Not A Moral Failing

Filing for bankruptcy today is a legal, structured way to hit reset. That’s all it is.

It’s not cheating the system. It’s not being irresponsible. It’s not giving up. It’s a process that exists to help people rebuild when things have gone sideways.

We’ve all seen those ads that make it sound scary or shameful. But the truth is that bankruptcy exists because even the government knows people need a way out sometimes.

That doesn’t make you weak. That makes you someone trying to get back on track.

In fact, using bankruptcy as a tool to reorganize your finances or protect your family can be a wise move if you’re doing it with the goal of healing and restoring your situation long-term.

Also Read: Benefits Of Filing Bankruptcy

Keep these in mind:

• Bankruptcy doesn’t define you
• You’re not your credit score
• God isn’t keeping a tally of your bank account

You’re doing what you need to do to move forward. And that’s brave.

Bottom Line

The Bible doesn’t give a clear-cut answer on bankruptcy, but it does offer a lot of wisdom about debt, repayment, and compassion.

It reminds us that debt isn’t something to take lightly, but it also encourages us to show grace, especially when others are struggling. God doesn’t want anyone to be stuck in a cycle of debt or poverty forever.

If you’re struggling, know that you’re not alone, and that there’s room for forgiveness and a fresh start.

FAQs

Is Bankruptcy A Sin?

No, bankruptcy is not a sin. The Bible never calls it a sin or something to be ashamed of. It talks about being wise with money and repaying debts when possible, but it also shows a lot of grace.

Bankruptcy is a legal tool that can help you reset and rebuild, and it’s not a moral failure.

Is It Ok For A Christian To File Chapter 7?

Yes, it’s absolutely ok for a christian to file chapter 7.

If you’re facing overwhelming debt and have no realistic way to repay it, Chapter 7 can be a responsible and honest step. Many Christians have used bankruptcy to get back on their feet.

The important thing is doing it with integrity and a heart that’s seeking to move forward, and not to avoid responsibility.