Whether the principles of Bankruptcy are moral is very important to me, as an unabashed Christian and Elder in the church I attend. It has been a question asked by my clients over the past 31 years.
Our Bankruptcy system not only allows for forgiveness of most debts, but it also allows the Debtor to keep property they own that is essential to keep them from falling back into financial desperation. This concept is expressed through our Bankruptcy law’s system of “Exemptions.”
Imagine a Bankruptcy system that allowed for the forgiveness of most of the bills but requires you to hand over everything you own to be sold to pay towards your bills, leaving you with no resources to survive on. Then imagine in, if your “possessions” included you and your family’s lives! In Biblical times, that happened! A man unable to pay his debts could expect he, his wife and children to be sold into slavery, permanently, to pay his debt. God didn’t like that practice and directed the children of Israel to be better as seen in Deuteronomy 15:12-14, which states:
If any of your people sell themselves to you and serve you for six years, in the seventh year you must let them go free. And when you release them, do not send them away emptyhanded. Supply them liberally from your flock, your threshing floor, and your winepress. Give to them as the Lord your God has blessed you.
Not only did God forbid slavery between the Israelites, but he also limited servitude to a period of 7 years. This is similar to “indentured servitude.” In early American History, settlers needing passage from their old country to America and provisions when they arrived would agree to serve the person financing them for 7 years. Additionally, God required the person “buying” the other person to not only release them after seven (7) years but also to “supply them liberally….as God had blessed them.”
God is good! He knew that when the person was released with no resources, he and his family would immediately fall into hunger and financial distress. They would quickly be right back in the financial crises that caused them to sell themselves in the first place.
The way our Bankruptcy System, modeled after biblical principles, helps people from falling back into financial crises is allowing them to “Exempt” certain property from being taken and sold to pay their debts. Over the past 31 years we have been able to help over 15,000 people receive forgiveness of debt through Bankruptcy, and 95% of the time, they keep all of their property by using the Exemptions System allowed by Bankruptcy.
Thank God we live in the United States of America, a country where our Founding Fathers believed in Judeo-Christian principles and drew heavily and positively upon the Holy Bible for guidance when formulating our Constitution and the “debt forgiveness” and “exemption” system we call Bankruptcy. It is there to help “the honest but unfortunate debtor.”