Dalton Camp proclaimed several years ago that “having lost its value, money may no longer be the root of all evil; credit having taken its place.” This statement demonstrates the paradox of modern-day Christianity and debt. Should the Christian reaction be one of condemnation or one of compassion? Since many recent respected studies have shown that the average American family is only three weeks away from personal bankruptcy, and since Congress is on the verge of passing legislation that will deny bankruptcy relief to hundreds of thousands of American families, it is time to revisit what the Bible teaches us about debt. [This article was written in 2004. It refers to the Bankruptcy Abuse Prevention and Consumer Protection Act, adopted in 2005.]
The Bible makes it clear that people are generally expected to pay their debts. Leviticus 25:39. No one in support of or in opposition to the Bankruptcy Reform Bill presently before Congress has advanced any argument against this general proposition. However, this moral and legal obligation to pay just debts must be balanced by such considerations as the need for compassion and the call to cancel debts at periodic intervals. The Biblical basis for such considerations is based on the sabbatical and Jubilee years. The secular basis arises out of the Constitutional of Congress to enact uniform laws allowing businesses and consumers to cancel and to restructure debt obligations. This Biblical support for the legal right to cancel debt is enforced by the even stronger Biblical doctrine that prohibited interest of any amount rather than just usury or excessive interest.
Within the areas of economic justice and stability, the Old Testament is replete with examples of compassionate treatment of the poor, and with preservation of the family unit. These goals were superior to the material concerns of repayment of debt. For instance, Deuteronomy 15:7-10 is particularly forceful. It provides as follows: “If there is a poor man among your brothers…do not be hardhearted or tightfisted toward your poor brother. Rather be open-handed and freely lend him whatever he needs. Be care note to harbor this wicked thought: ‘The seventh year, the year for canceling debts, is near,’ so that you show ill toward your needy brother and give him nothing. He may then appeal to the LORD against you, and you will be found guilty of sin. Give generously to him and do so without a grudging heart; then because of this the LORD your God will bless you in all your work and in everything you put your hands to.”
The cancellation of debt in the Old Testament was accomplished at legislated intervals. Deuteronomy 15:1-2 clearly provides for such legislative release with the following language: “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”. Under this Biblical model, the debtors’ payment or non-payment of debts was not in question. The debtors may or may not have been culpable for their debts. It was a strict model with no “means test” or detailed analysis of every debt. And, while Old Testament leaders were admonished to be merciful, debts were canceled every seven years whether they liked it or not. The Old Testament model can, therefore, be legitimately applied to modern day bankruptcy laws. The principle, therefore, is that while taken seriously, debt can be canceled to achieve some higher purpose such as the preservation of the family unit. It also should be noted that Deuteronomy 15:12-13 provides that slaves should be freed every seven years creating an interesting analogy between the creditor-debtor and the master-servant relationship.
The Biblical use of the term usury corresponds to our modern word interest rather than to the notion of “excessive interest” to which we generally apply the term usury today. Only a small number of us would seriously question the morality of profiting from a loan at normal interest rates. However, the Talmud quotes an ancient rabbi as saying: “It is better to sell your daughter into slavery than to borrow money on interest.” The Lord only knows what this same rabbi would say today if confronted with credit cards bearing interest rates of 34.99% and higher and with some “pay day” lenders demanding annual rates in excess of 800%.
The Biblical doctrine of usury rests primarily on three texts: money lender Exodus 22:25; Leviticus 25:35; and Deuteronomy 23:19-20. Exodus and Leviticus prohibit loans of money or food with interest to a needy brother or sister or even a resident alien. Deuteronomy forbids taking interest from any person. Other Books of the Bible underline the importance of this prohibition on interest. For example, Psalm 15:5 characterizes a righteous man as one who, among other things, “lends his money without usury.” Both Ezekiel 22:12 and Nehemiah 5:0-11 condemn lending money with interest, especially to the poor. And Ezekiel 18:13 list the taking of interest among sins worthy of death.
The prohibition on interest is based on God’s covenant with Israel. The rule is founded upon the compassionate treatment of various oppressed groups: the resident alien; the widow; the orphans; and the poor. Exodus 22:25-27 states the law in explicit terms: “If you lend to one of my people among you who is needy, do not moneylender; charge him no interest. If you take your neighbor’s cloak as a pledge, return it to him by sunset, because his cloak is the only covering he has for his body. What else will he sleep on? When he cries out to me, I will hear, for I am compassionate.” Leviticus 25:35-37 provides that “If one of your countrymen becomes poor and is unable to support himself among you, help him as you would an alien or a temporary resident so that he can continue to live amount you. Do not take an interest of any kind from him, but fear your Go, so that your countryman may continue to live among you. You must not lend him money at interest or sell him food at profit.” Finally, Deuteronomy 23:19-20 provides: “Do not charge your brother interest, whether on money or food or anything else that may earn interest.”