Bankruptcy is not a failure or a sin.
At the end of every seven years you shall grant a release. And this is the manner of the release: every creditor shall release what he has lent to his neighbor, his brother, because the Lord's release has been proclaimed."
Though the Bible makes it clear that debts must generally be repaid, it places compassion for the needy and preservation of the family above all else. Overall, the main lesson of both the Old and New Testaments is that mercy is to come before pure economic concerns.
Additionally, many verses by Deuteronomy, Exodus, Leviticus, Ezekiel, and Nehemiah all prohibit loans of money with interest, particularly to the vulnerable, further solidifying why it’s important to relieve those who have gotten into debt due to payday loans and subprime credit cards and auto financing.
