Debt: A Way Out, But Not a Way of Life

May 7, 1998

 
 
Old Testament & New Testament Model

• Most Biblical texts are in reference to the people & nation of Israel.
• While New Testament references are few, they coincide with the Old Testament.
• Principles from the Old Testament will be considered valid for today.

Finances: A Partnership With God

• There are four parts to the basic equation of finances:

Income - Spending = Savings + Debt (Just Say No)

• In each of the first three terms we are in partnership with God.

Income: God ultimately provides, but we are to labor (Ps 104:14).
Spending: Our priority expenditure is to return to God what is His (Mt 22:15-22).
Savings: God ultimately owns, but we are to manage (Lk 16:1-13).

• In contrast, when we are in debt, we are in partnership with man (Prov 22:7).
• In addition, our children may inherit this cycle of debt & partnership (Neh 5:1-5).

Conditions for Lending & Borrowing

• While borrowing is discouraged in Scripture, it is permitted & regulated.
• Israel could lend to other nations but not borrow from them (Deut 15:6).
• If one was impoverished, they could borrow (Lev 25:35, Deut 15:7-11, Mt 5:42).
• Conversely, others were to generously lend to the poor whatever they lacked.
• Within the Biblical perspective, indebted people & nations are impoverished.

Term & Final Collection

• The term of the loan was seven years (Deut 15:1-5, 31:10, Neh 10:31).
• At this time, the sabbatical year, all debts were canceled freeing the people.
• The outstanding amount owed by those within the nation was not to be collected.
• In this case, the remaining amount owed was given to the debtor (Lk 6:34-35).
• The outstanding amount owed by those outside the nation could be collected.

Interest

• Interest was not extracted from a brother.
• The texts include Ex 22:25, Lev 25:36-37, Deut 23:19, Ps 15:5, Eze 18:7-9.
• Interest could be extracted from others outside the nation (Deut 23:20).
• The interest which is collected will find its way to support the poor (Prov 28:8).

Payment

• Refusing to pay what is due is considered evil (Ps 37:21).
• Believers are encouraged to not owe anyone anything (Rom 13:7-8).

Collateral & Cosigning

• Collateral was permitted, but strictly regulated.
• It was not to be things which supported basic living (Ex 22:26-27, Deut 24:6).
• One could not trespass another's property to collect collateral (Deut 24:10-13).
• Cosigning is disapproved in several texts (Prov 6:1-5, 11:15, 17:18, 22:26-27).
• If one has cosigned, they should plead to remove themselves.