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What does the Bible say about Debt?

God’s Resources & Our Stewardship – What the Bible says about Debt

Surrounded by a culture that uses debt excessively, what is our responsibility as we follow Jesus and what does the Bible have to say on the topic?

Our culture certainly isn’t afraid of utilizing debt. A recent study by USA Today showed that over 1/3rd of Americans have debt that is so far past due that it has gone to a collection agency. This means that their debt is over 180 days past due! Another survey showed that the average credit card debt per household that has a credit card in the US is $15,706, the average mortgage is $156,333 and the average student loan is $32,953. Our culture puts what they can’t afford onto their credit card, takes out mortgages it can’t pay off and dives head-long into student loan debt sending their children to college for degrees that don’t have job placement to pay off those loans.

Many people that come from conservative backgrounds, including most Christian churches, have been taught that the Bible forbids the use of debt. Let’s take a look about what the Bible does and doesn’t say concerning debt so that we have the tools to make wise decisions with the resources God has given us to steward.

Don’t Love Money, Love Jesus, The Giver of Money

“For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs.” – 1 Timothy 6:10. The Bible says that the love of money, or the idolatry of money, produces all kinds of evil. It is not the source of all evil, but produces all kinds of evil when we love God’s gifts more than Him. A person may end up in debt because they love money, or the things that they can buy with it, too much. The suffering of unaffordable debt payments is one example of what the Bible calls “many pangs”.

Proceed Into Debt Very Carefully

“The rich rules over the poor, and the borrower is the slave of the lender.” – Proverbs 22:7.

“Be not one of those who gives pledges, who put up security for debts. If you have nothing with which to pay, why should your bed be taken from under you?” – Proverbs 22:26-27. The Bible doesn’t forbid the use of debt. If it did, almost no Christians would be able to afford a house. What the Bible does say is that a new identity is assigned to the one who goes into debt, that of being a “slave”. In a financial sense, the one who owes a debt is a slave to the one who lent them the money. Consequently, the Bible warns us not to take out debt we can’t pay off.

Nevertheless, we also know that borrowing money may still be necessary, and even unavoidable at times. In such cases, the Bible encourages people to make the decision to use debt very carefully. Like most useful tools, used in an inappropriate way, debt can cause much more harm than good. That being said, it is still a tool that can be useful, and one that the Bible doesn’t forbid.

Pay Your Debts

“Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed.” – Romans 13:7. God calls us, and the Bible teaches, for us to pay our bills timely. That doesn’t mean that we will never carry a credit card balance, or that we won’t ever forget to pay our mortgage. Rather, God is concerned about our heart. God wants our heart to desire integrity and honor as we attempt to follow through with what we have committed to. As we pay what we owe, it reflects God’s integrity of character.

Make Sure You Can Afford Your Standard Of Living Without The Use Of Debt

“Better to be lowly and have a servant than to play the great man and lack bread.” – Proverbs 12:9. The Bible warns us about keeping up with the Jones’s. Make sure your standard of living is one that you can actually afford. For instance, young people may have to readjust their standard of living after moving out of their parents’ house as they go to college or get a job. Another example is the first or second house a young couple chooses to buy might not be as nice as the one they grew up in with their parents. It takes time to earn nice things. We don’t deserve everything we want when we want it. Going into debt to maintain a standard of living that is above your means is a sure way to financial ruin.

Be Cautious About Cosigning Loans

“Be not one of those who give pledges, who put up security for debts. If you have nothing with which to pay, why should your bed be taken under you? “– Proverbs 22:26-27. In short, if you co-sign a loan for anyone, be prepared for the consequences. The warnings are clear; the one who chooses to cosign a loan should be prepared to have to pay back that loan. In the event that the primary debtor defaults onpaying their loan, the cosigners’ credit is damaged as a result. Jesus may call some Christians to do thisfor someone; it would be wrong to say that it is always a sin to cosign a loan. However, the Bible calls usto know the risks of doing so and considers the decision generally unwise.

“My son, if you have put up security for your neighbor, have given your pledge for a stranger, if you are snared in the words of your mouth, caught in the words of your mouth, then do this, my son, and save yourself, for you have come into the hand of your neighbor: go, hasten, and plead urgently with your neighbor. Give your eyes no sleep and your eyelids no slumber; save yourself like a gazelle from the hand of the hunter, like a bird from the hand of the fowler.” – Proverbs 6:1-5. The Bible says that if you either cosign a loan, or are in some other financial agreement that you can’t handle, go try and get out.

Be Careful Who You Loan Money To

“The rich rules over the poor, and the borrower is the slave of the lender.” – Proverbs 22:7. Anytime you lend someone money, they are now a “slave” to you. Even with the best of intentions, this creates a dynamic in your relationship with the borrower that will change your relationship in ways that can be detrimental. In the event that you loan someone you care about money and they fail to pay you back, your relationship may be damaged in a way that you would never want to risk. This is especially true of close friends and relatives. Ask yourself this question before you loan money to a friend or relative: “If they didn’t ever pay me back, would I be okay with it and be able to move past this in our relationship?” If the answer is no, it would be unwise to make the loan in the first place.

Don’t Exact Interest On The Poor

“If you lend money to any of my people with you who is poor, you shall not be like a moneylender to him, and you shall not exact interest from him.” – Exodus 22:25

To paraphrase Nehemiah 5:1-13, as well as summarize Exodus 22:25, don’t exact interest from those who can’t afford to pay it! Charging interest to other Christians on loans isn’t forbidden in the Bible like some people think. However, the Bible clearly states that we shouldn’t charge interest on loans to people who can’t afford to pay it. God would have us value and love the debtor more than the money that they owe.

In summary, debt is a tool to be used carefully. The Bible doesn’t forbid the use of debt, but calls followers of Jesus to make the decision to use debt wisely, knowing the consequences. As we make wise decisions about debt, it can give us the financial freedom to respond to Jesus’ call when He asks us to do something for His kingdom.

 

References:

http://www.usatoday.com/story/money/personalfinance/2014/07/29/america-debt-loads/13152651/

https://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/