Is Taking Bankruptcy Scriptural?

In the April, 1996 edition of “Faith And Facts,” an article stated about Foy Wallace, Jr., “Wallace declared bankruptcy shortly after his return to Oklahoma City. While in 1996, this does not seem such a great matter, it is important to note that it was considered almost sinful in 1934.” I consider both this quote and what our brother Wallace did very unfortunate. The Bible doesn’t just teach bankruptcy is “almost sinful,” but absolutely sinful, whether it is 1934, 1996, or today in 2021.

In a context of paying money (verse 7), Romans 13:8 says “Owe no man any thing, but to love one another …. The Old Testament taught the same thing in Psalms 37:21 by saying, “The wicked borroweth, and payeth not again ….” Taking bankruptcy that allows a person not to have to pay their debts is in effect stealing and therefore violates passages like Ephesians 4:28, “Let him that stole steal no more …. It doesn’t matter that the government makes it legal (Acts 5:29); it is a transgression of God’s word, therefore sinful (I John 3:4).

Bankruptcy also violates the following two passages: I Thessalonians 4:11-12 “And that ye study to be quiet, and to do your own business, and to work with your own hands, as we commanded you; That ye may walk honestly toward them that are without, and that ye may have lack of nothing” and Matthew 7:12 “Therefore all things whatsoever ye would that men should do to you, do ye even so to them: for this is the law and the prophets.”

A number of Christians have taken bankruptcy. If they won’t repent, they need to be withdrawn from, because they have demonstrated covetousness (I Corinthians 5:11). Since they will not meet their financial obligations/commitments, as such they are “covenant breakers” and therefore will be lost eternally (Romans 1:31-32).

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