My
how times have changed!
Centuries
after Moses had received the Law from God on Mount Sinai, the Jews
had grossly deviated from God’s divine plan. They had started
charging interest to each other (Ezekiel 22:12). They had begun
oppressing the poor by repossessing the clothes from each other in
the event of loan defaults (Amos 2:8).
God
saw this type of behavior and called it wicked. God sent prophets
such as Isaiah, Jeremiah, Ezekiel, Amos, and Hosea and warned the
northern Kingdom of Israel and the Southern Kingdom of Judah. In
fact, at one point God said that Jerusalem was more wicked than Sodom
and Gomorrah because, among other things, they had been oppressing
the poor by their lending practices (Ezekiel 22:12).
Ultimately,
God judged Israel and then Judah and allowed each kingdom to be
punished and taken into captivity. First the Assyrians took the
Northern Kingdom of Israel into captivity (2 Kings 17:5-7). Later
Babylonia took the Southern Kingdom of Judah into exile in
Mesopotamia (2 Kings 25:1-22). The conquering King Nebuchadnezzar of
Babylonia did not take 100% of the people to exile. He destroyed the
Temple in Jerusalem where the law had been kept, and he left some of
the people, a remnant, behind in the land (2 Kings 25:22). I suppose
he didn’t want to erode his tax base, so some people were left
behind to tend fields and olive trees, and keep out the wild animals.
The Assyrians who had taken Israel captive fell to Babylonia (Ezekiel
32:22-23). The Babylonians were later conquered by the Medes and
Persians (Daniel 5:31).
Approximately
70 years after the fall of Jerusalem, the Jews were ruled by
Artaxerxes, King of Persia (Nehemiah 2:1). He had been served by a
good Jewish prophet named Nehemiah. Nehemiah had been reading some of
the ancient scrolls of his Jewish ancestors and learned of the
destruction of Jerusalem. Artaxerxes gave his permission and the
money for Nehemiah to go with a contingent and rebuild Jerusalem
(Nehemiah 2:4-10). When Nehemiah got there he found not only was the
city in disarray with its fortified walls destroyed, but he also
found a dysfunctioning social structure of the Jewish remnant who had
been left behind 70 years earlier by Nebuchadnezzar.
In
Nehemiah, we see many ugly circumstances (Nehemiah 3:13; 5:1-13). The
people were in dire straights and had borrowed heavily to get food
during a famine and pay high taxes. We know from secular sources that
there was a shortage of food, resulting in a 50% rise in prices.
In
those tough economic times of famine, taxes, and inflation, families
in Israel would borrow. Upon default, if the borrower could not repay
the loan, foreclosures happened and the borrower’s children, wife,
or the borrower himself, could go into slavery as a bondservant.
Ironically, if those Israelites had been slaves in Mesopotamia, at
least the families would have remained together, yet due to the
oppression of the Jewish bill collectors in Jerusalem, the families
could be torn apart at slave market sales.
Nehemiah
saw this and was outraged. He arrived on the scene and heard the
complaint of the people. The Scripture reads:
“Now
there was a great outcry of the people and of their wives against
their Jewish brothers. For there were those who said, “We, our sons
and our daughters are many; therefore let us get grain that we may
eat and live.” There were others who said, “We are mortgaging our
fields, our vineyards and our houses that we might get grain because
of the famine.” Also there were those who said, “We have borrowed
money for the king’s tax on
our
fields and our vineyards. “Now our flesh is like the flesh of our
brothers, our children like their children. Yet behold, we are
forcing our sons and our daughters to be slaves, and some of our
daughters are forced into bondage already,
and
we are helpless because our fields and vineyards belong to others.”
Then I was very angry when I had heard their outcry and these words.”
(Neh.
5:1-6)
These
Jewish borrowers were enslaved by the other Jewish Noblemen and
officials. Their fields and vineyards had been foreclosed. Their
children were sold into slavery and were exploited. The safety valve
God had given to Moses at Mt. Sinai, namely the Jubilee and
cancellation of debt, had been abandoned. We read that Nehemiah
became furious! He was not
mad at the poor persons in debt. He was outraged towards the bankers
who were heavy handed:
“Then
I was very angry when I had heard their outcry and these words. I
consulted with myself and contended with the nobles and the rulers
and said to them, “You are exacting usury, each from his brother!”
Therefore, I held a great assembly against them. I said to them, “We
according to our ability have redeemed our Jewish brothers who were
sold to the nations; now would you even sell your brothers that they
may be sold to us?” Then they were silent and could not find a word
to say.
Again
I said, “The thing which you are doing is not good; should you not
walk in the fear of our God because of the reproach of the nations,
our enemies? “And likewise I, my brothers and my servants are
lending them money and grain. Please, let us leave off this usury.
“Please, give back to them this very day their fields, their
vineyards, their olive groves and their houses, also the hundredth
part
of
the money and of the grain, the new wine and the oil that you are
exacting from them.” (Neh. 5:6-11)
We
see Nehemiah himself had gone to the slave market and with his own
money bought those children to return them to the parents. He called
a community-wide meeting and scolded the officials and publicly
proclaimed the bankers were the sinners for oppressing the poor. He
blasted them for their foreclosures and for charging interest. And
what was the high rate of interest (usury) that was being charged? It
was only ONE PERCENT interest, “the hundredth part of the money,
grain, new wine, and oil (Nehemiah
5:11).
Can
you put that into perspective for today? The prophet Nehemiah was
outraged at the lenders, not
those in debt. He blistered the bankers for charging 1% interest and
for conducting foreclosures! Today you are being hit with late
charges, over the limit fees, default interest rate interest charges,
electronic payment fees, collection fees, attorney fees, etc. and yet
you are beating yourself up? Would Nehemiah have dressed you down or
your creditors? Read these scriptures again and form your own
conclusions.
Yeah,
that was in the Bible, but today it’s different… or is it really
different?
Someone
may have a hard time with recognizing there are Biblical principles
involved and then translating those concepts into modern American
life. I’ve even heard respected Biblical teachers say “Yeah, you
can bankrupt on the debt but you still owe it.” They try to say
that in virtually all circumstances a debt cannot be discharged in
bankruptcy by a Christian. These well-intentioned Biblical teachers
will attempt to “prove” bankruptcy is always wrong by quoting a
scripture such as Psalms 37:21:
“The
wicked borrow and do not repay, but the righteous give generously.”
This
scripture does contrast a wicked versus a righteous heart:
contrasting exploitation versus generosity.
Let’s
look closely at Psalms 37 to see if it supports the proposition that
Bankruptcy is wrong. The pattern emerging from the analysis of the
entire Psalm is not to condemn one who has the inability to repay;
instead this Psalm looks to one who “schemes” (Ps. 37:7) or
“plots against the righteous” (Ps. 37:12). In other words, the
Psalmist looks at those who intentionally rip-off others. There is no
indication that those who are ensnared by debt cannot obtain relief.
The Psalmist contrasts evil plotters and schemers with the righteous.
He does not contrast those who have the inability to pay with the
righteous. Therefore the scripture often cited for the proposition
that those who do not repay are wicked, should more accurately be
understood to say that those who plot and scheme to defraud others
are wicked.
We
as Christians are the first to support the government:
“…render
to Caesar the things that are Caesar’s; and to God the things that
are God’s.” (Mt. 22:21) We stand for law and order. That being
the case, some pastors will assert that it is sinful to modify a
contract and leave a debt unpaid in Bankruptcy Court. Let’s look at
that issue, by looking at the founding of our country.
We
typically think of the beginning of our country as July 4, 1776, with
the Declaration of Independence. It was on that date that thirteen
colonies, from Maine to Georgia, banded together to revolt against a
common Sovereign, Great Britain. There was, with the Declaration, the
beginning of the beginning, but those colonies were not unified.
Let’s
look at a timeline to put matters into perspective:
These
several critical dates in the birth of the United States that are
relevant to our consideration:
July
1, 1776 – Declaration of Independence
December
12, 1776 – Third Continental Congress convenes
November
11, 1777 – Articles of Confederation proposed
March
1, 1781 – Articles of Confederation – ratified
February
2, 1783 – English declare hostilities ended
April
11, 1783 – America declares hostilities ended
January
14, 1784 – Treaty of Paris, Revolutionary War officially ends
May
25, 1787 – Constitutional Convention opens in Philadelphia
September
17, 1787 – Final Draft of Constitution
June
21, 1788 – Constitution ratified
May
4, 1788 – The United States Constitution goes into effect.
At
first the thirteen Colonies were independent from each other, but
during the course of the Revolutionary War they joined together under
the Articles of Confederation. As Colonies they each acted in their
self-interest. Under the Articles there were aspects where each
colony cooperated with each other but there was still self-interest
that made it difficult for consolidated effort to be made.
For
example, the Continental Congress depended on the Colonies to raise
their respective militias to be brought forward for the Revolutionary
War. Also, the Continental paper dollar was considered worthless when
it was not backed by gold reserves.
After
the war, trade was tough. Imagine if you were a tobacco farmer in
North Carolina and you wanted to sell your crop and buy a plow. You
might load your wagon, go into Virginia, and pay a toll and tariff as
you went from colony to colony. You might pass from Virginia to
Maryland, to Pennsylvania, New Jersey, then New York. In New York you
could sell your crop but there was no simple national currency. You
might go to New York to buy a bank bond, and travel to Philadelphia
to cash the bond, and then double back to Valley Forge to buy a plow.
Then you would be taxed and tarriffed all the way back to North
Carolina. This example is a hypothetical, but it illustrates a type
of problem that one might see under the Articles of Confederation.
This was no way to form a Nation so the push was on to have a central
Federal government that was controlled by the Constitution.
Under
the terms of the Constitution, the states delegated some of their
rights to the central federal government. From the time of the
Declaration of Independence to 11 ½ years later when the
Constitution went into effect, those 13 little independent British
Colonies were transformed into group of states with a central
government, the United States government.
By
each state agreeing to be bound by the Constitution, each state
agreed to yield rights from itself to the new federal government. So
in other words, the states agreed, among other things, that their
state contract law could be modified by federal Bankruptcy law. In
the Constitution Article 1, Section 8 enumerates the Powers of
Congress. Included in the enumerated powers of Congress was the power
of Congress to create uniform Bankruptcy laws. This is crucial for
the reader to comprehend. When the Constitution was ratified it
transformed the nature of contracts. Before ratification a contract
was a property right to be interpreted under each State’s law.
However, after ratification the right of the holder of the contract
had a contract that could be modified under Federal Bankruptcy Law
(U.S. Constitution, Article I, Section 8, Clause 4). Following
ratification of the Constitution, over 200 years now, each party of a
contract understands that the terms of a contract may be modified if
the bankruptcy conditions set by Congress in the bankruptcy code are
satisfied. For example, for years Heilig-Meyers Furniture Company was
a creditor in Bankruptcy Court. Eventually, Heilig-Meyers became a
debtor. Each party to a contract might be a creditor in a case then a
debtor in a later bankruptcy case. In either event, each party to the
contract negotiates the contract with that understanding.
Imagine
if a bank opened a credit card operation in South Dakota where it is
a responsible corporate citizen. The legislature in South Dakota
might pass favorable legislation for that bank which authorized it to
issue very favorable credit card terms, but those terms might not be
well received in Tennessee. Under the state law of South Dakota, a
lender might be allowed to raise a credit card interest rate so that
the borrower might owe 30% interest. The borrower might struggle to
pay off that card at 30% interest. He might find himself in my office
saying he cannot afford the credit card. He might ask me whether
there is there any law that would allow him to pay less than the full
principal balance plus 30% interest. I then might say, yes. There is
a special court set up that triggers special laws to modify interest
rates and modify the amount of principal to be repaid. That is the
United States Bankruptcy Court. That court allows federal law to
modify state law contracts. That federal law is authorized by the
U.S. Constitution.
You
may be a bit bewildered at how this is possible. Let me give you an
example. Let’s suppose that you and I met in the tallest building
in your downtown area and we decided to leave and rendezvous 30 miles
away. You agreed to drive on the surface streets and abide to the
speed limits and traffic rules under State law. You might average 30
miles per hour and you would reach your destination in an hour. I, on
the other hand, might choose to take advantage of Federal law and
take the Interstate. I might average 60 miles per hour and get there
in 30 minutes. You take twice as long as me. Have either one of us
done anything wrong? You drive at 30; I drive at 60. You use State
law; I use Federal law. Each law was available to each of us, yet we
have entirely different outcomes. Neither has done anything wrong. We
have simply made separate choices.
What
is the difference between speed limits and contractual interest
rates? In either circumstance, Federal law might dictate a more
advantageous outcome.
You
might respond there is a moral difference because in the interest
rate example there is a “promise” to pay whatever the interest
rate may be. I submit that is irrelevant.
I
might “promise” the speed limit is 30 mph but yet under special
circumstances it could be criminal for you to drive the speed limit.
There can be a change of circumstances that arise that render you
unable to drive the 30 mph speed limit. For example you would have to
slow down or stop for: adverse weather; auto accidents; road
construction; a parade; a funeral; natural disaster; police
intervention and directions; active school zones; or a traffic snarl.
Even though I “promised” you could drive the speed limit, you
might encounter an extraordinary circumstance that mandated you do
something else. In fact the State controlled surface streets might be
so bogged down that you might change your mind and go onto the
Federal interstate and breeze along to your destination. You may then
marvel at yourself and ask what took you so long to get around to
helping yourself!
In
a similar fashion when circumstances arise in the course of human
events, you may have encountered extraordinary circumstances that
mandate you no longer use State law but you use Federal law instead.
Circumstances might mandate you use Federal Bankruptcy law to modify
your legal obligations initially defined under State law.
By
the powers granted to Congress it has the authority to enact
Bankruptcy law that supersedes State contract law. You have the right
to apply to the Bankruptcy court to see if you qualify for Federal
law relief under the Bankruptcy Code.
The
Bible contemplates such an outcome. We are ordered to abide by the
law:
“Everyone
must submit himself to the governing authorities, for there is no
authority except that which God has established. The authorities that
exist have been established by God. Consequently, he who rebels
against the authority is rebelling against what God has instituted,
and those who do so will bring judgment on themselves. For rulers
hold no terror for those who do right, but for those who do wrong. Do
you want to be free from fear of the one in authority? Then do what
is right and he will commend you. For he is God’s servant to do you
good. But if you do wrong, be afraid, for he does not bear the sword
for nothing. He is God’s servant, an agent of wrath to bring
punishment on the wrongdoer.” (Romans 13:1-4)
This
passage is explicit. It is the Sovereign God himself who establishes
the law making authorities. (Rom. 13:1). Anyone who resists those
authorities resists God’s ordinances (Rom. 13:2). For that
resistance they receive condemnation from God (Id). God has given
those laws for your Good.
(Rom. 13:4) Therefore when a Federal Bankruptcy Judge considers your
petition for Bankruptcy relief and deems you worthy of that grace,
the Court is God’s servant, “a minister of God”. (Rom 13:4)
Your duty as a Christian is to accept God’s grace.
The
Sovereign God has provided a way for you to cope with these bills in
this place and time of history, by a legal means. It is up to you to
accept this opportunity He has given to you. God has provided through
the Bankruptcy court a balance point between the justice that
creditors want and the mercy that debtors need. The balance between
justice and mercy is what He requires of each of us:
“He
has showed you, O man, what is good. And what does the Lord require
of you? To act justly and love mercy and to walk humbly with your
God.” (Micah 6:8)
In
summary, it does not seem that it is accurate to assume that to file
Bankruptcy is a sin. God created a government for the Jews in which
financial oppression was disallowed. In the Bible, when His people
violated those principles, He judged those people and allowed the
Jews to be taken into slavery. Instead of trusting in God, the Jews
trusted in their business model and turned away from His principles
to their own.
The
United States has a Constitution where each state has granted some of
its rights to the Federal government. Among those rights is the power
of the Federal government to create Bankruptcy law. Bankruptcy law is
given by God for our good.
God
gives us government to produce ordinances for our good. To resist
those ordinances is to resist God. Our call is to simultaneously do
justice, and show mercy, while walking humbly before God. Anything
short of that is sin. Filing Bankruptcy is not sin. It is God’s
mechanism to maintain civil order while balancing justice and mercy.
Ken
Rannick
Chattanooga,
Tennessee
©
2010
