The debt crisis is very much in the news today. It is on the one hand a rather simple matter; yet on the other, there can be many complicating aspects to it, especially given the time in which we live.

The simple answer is that Scripture in general looks at debt very negatively. God desires His people to be free not only from sin (1 John 2:1-6), but also from burdensome debt (Deut. 15:1-2). Scripture frequently discourages debt, but recognizes that it cannot always be avoided. Habakkuk 2:2-8 warns against the practice of using borrowed funds to enhance one’s standard of living, which is what a lot of today’s credit card debt is about.

At the same time, we have to take into account the com­plexity of today’s society. When someone borrows to buy a home, the value of their property tends to exceed that of their mortgage. The savings of established workers make it possible for young people to borrow in order to get an educa­tion. Pension funds lend to companies that need to invest in space and equipment in order to produce goods and services and hire workers.

Moreover, the Bible encourages lending to people who lack the basic necessities of life at zero interest. It discour­ages the charging of excessive rates of interest that enrich the wealthy at the expense of the poor. Let’s unpack some of these points further by reviewing Scripture’s teaching on debt.

Old Testament⤒🔗

Lending can be an act of love to our fellow man, which pleases God. The Hebrew words used for lending signify that the lender lifts a burden from the borrower by helping him through a crisis. Since the borrower hopes to be able to pay back what he owes the lender, he can receive this help with thanks and self-respect. This is why in the Mosaic Law the Lord forbade an Israelite to take interest from a fellow Israelite in such circumstances. In a brotherhood, help should be given freely and not for profit. The motive behind this is that without the LORD’s deliverance from bondage in Egypt all Israelites would have continued as slaves (Lev. 25:35-38; Ex. 22:25). Meanwhile, however, God allowed the Israelites to lend at interest to non-Israelites (Deut. 23:19, 20), presumably as part of a more businesslike type of transaction.

However, Israel did not, in practice, follow these guide­lines required by the Lord. The preaching of the prophets reveals that abuses became a scourge to the people. Exor­bitant rates of interest were charged, representing a social plague, rendering poor debtors destitute. The prophet Eze­kiel described Israel as having broken all the statutes of the law regarding debts and interest (Ezek. 18:8, 13, 17; 22:12; cf. Neh. 5:1-13).

New Testament←⤒🔗

In the New Testament Jesus and the apostles take excep­tion to such selfish commercial practices carried over from Old Testament times. Although Jesus nowhere condemns lending with interest per se, His words warn against living for money (Matt. 6:19-21). Commercial abuses are typical of the kingdom of mammon. No one can serve two masters (Matt. 6:24). Jesus criticizes the accumulation of wealth at the expense of the poor, just as in the Old Testament. At one point a creditor is portrayed as forgiving debt just as God forgives sin (Luke 6:41-42).

Jesus calls for single-minded allegiance to the King. In that context, we are stewards of everything we have – family, home, business. We do not possess them. They are gifts lent to us by the Lord for free, the blessings of His rule over us. They are never to become our masters, nor to compete with Him for mastery over us.

Spiritual debt←⤒🔗

The Scriptures use the term “debt” also to describe our rela­tionship to God because of our sin. Sin is a debt that must be paid or canceled before man is free. On the cross Christ paid the debt of His people and fulfilled all righteousness. The Holy Spirit is the Guarantor of the inheritance of the believ­ers in Christ. The Bible sometimes uses the term “debt” to refer to sanctification or the gospel ministry. Paul is “a debtor” to preach the gospel to “the Greeks, and to the Barbarians” (Rom. 1:14). Christians are “debtors, not to the flesh, to live according to the flesh” (Rom. 8:12). The Gentiles are debtors to those who shared the gospel with them (Rom. 15:26, 27).

Scriptural Guidelines regarding debt←⤒🔗

1. Duration of debt←↰⤒🔗

When personal debt is unavoidable (mortgage, education, or a situation of calamity), how long should the loan remain outstanding? The Old Testament law placed a seven-year limit on debt (Deut. 15:1-11; 31:10-11). In fact, ‘seventh years’ were to be designated throughout the land as times for cancelling debts. Cancellation was to take place during the Feast of Tabernacles (Deut. 31:10). This provided a time for community-wide celebration when everyone was released from their debt burdens.

These instructions regarding the cancellation of debts were given to limit lenders, not borrowers, for they were in positions of financial power. In this arrangement, the lender knew that if he loaned a sum of money that could not rea­sonably be repaid by the year of release, then the balance of the obligation was to be forgiven. This required the lender to care for the long-term best interest of those who were financially distressed.

This principle of the prosperous and powerful being under obligation to care for the long-term best interest of the weak and needy overflows into every area of the Bible’s teaching, not just creditor/borrower relationships (Prov. 29:7; 31:8-9; Jer. 5:28).

Are these requirements still applicable today? Allow me to simply say that our debt burdens and the percentage of our income used to service debts would be more manageable if God’s wisdom were heeded. It is ignored to our own detriment.

2. Commands to give and lend←↰⤒🔗

We are called upon by God to both “give” and “lend” to our neighbors (Matt. 5:42; Luke 6:30-35). When are we to give, and when should we lend? We are to give to those who have legitimate authority to ask for our money. For example, taxing authorities have this right (Rom. 13:5-7). We are to give to those who have immediate, acute needs – the hungry, naked, and cold (1 John 3:16-18). There are times, however, when lending and not giving is the loving response to a genuine need (Deut. 15:7-8; Luke 6:30-35). It is in everyone’s best long-term interest for individuals to assume the full responsibility, and its accompanying obligations, for the well-being of themselves and their dependents.

Lending to the needy, when there is no real chance of repayment, positions the act of lending (without expecting to get it back) as one of true charity. By this act, though, the recipients are enabled both to maintain their self-respect and to acknowledge the basic truth that they should, if at all pos­sible, care for themselves. It allows the borrowers to affirm their desire and hope to be able to meet their obligations. It allows the lender to emulate God who forgives our debts, as we are expected to forgive our debtors (Matt. 6:12-14; 18:21-35).

3. Guaranteeing another’s debt repayment←↰⤒🔗

Upon occasion friends or acquaintances ask us to help them secure their loans. Should a person endorse or co-sign a debt obligation for the benefit of another person? Scripture provides strenuous and explicit warnings against doing this. Proverbs 22:26-27 warns against guaranteeing the repay­ment of another’s loan, if one lacks the means, or else one will find oneself suffering unaffordable losses. In such cases, the borrower is attempting to reach beyond his financial ability and take advantage of the lender in such situations.

4. Obligations to repay debts←↰⤒🔗

Is there a moral defense for a debtor declaring bankruptcy? There is no defense, if the borrower has an arrogant atti­tude from the time the money was borrowed, reasoning that, if things turn financially sour, the money will not need to be repaid because the obligation is avoidable in bankruptcy court. Seeking voluntary bankruptcy under the civil law is not prescribed in Scripture. However, the Bible does instruct us to seek release directly from those for whom we have entered into guarantees if we need to do so (Prov. 6:1-6). The righteous also give their word and honor it, even when doing so creates personal hurt (Ps. 15:4).

Scripture defines borrowing and not paying back as wickedness (Ps. 37:21). Suppose, however, the creditors force the borrower into involuntary bankruptcy, and the court, after distributing all assets, declares the debtor absolved from the unpaid balances. Is a Christian in such a case still morally obligated to pay? In such a situation, continuing to repay a legally excused debt is a powerful testimony to the unbelieving world of the integrity of the debtor, and in doing this, the Christian emulates the unchanging character of God, who honors His word in all circumstances (Num. 23:19; Titus 1:2; Heb. 6:13-20). We are called to imitate the character of God.

5. Speculative borrowing←↰⤒🔗

The world teaches that borrowing is good, especially if we expect to speculate with it. But is it morally right? Scripture warns against such speculation which may fail and cause us to lose more than the value of the assets that we acquire (Prov. 22:7; Hab. 2:6-7). Why does one desire to speculate with borrowed money in the first place? Scripture calls us to examine our hearts to see if greed and covetousness are present. Beware of them (Prov. 11:6; Isa. 56:11; Luke 12:15; Rom. 1:29; 2 Peter 2:14)!

6. National debt←↰⤒🔗

Biblically, a nation that maintains a creditor (lending) posi­tion, rather than a debtor (borrowing) position, is seen as bearing the mark of God’s special blessings (Deut. 15:6; 28:12–13). This is so, for a nation that borrows must accept controls on its economic policies and thereby becomes subject to the restraints imposed by its creditors. Moreover, a portion of its real wealth is transferred out of this nation to its foreign creditors. This prevents this wealth (interest and principal repayment) from being used by this nation. Thus the capital used to repay the borrowings, both interest and principal, must be less than the returns earned on the bor­rowed funds, or else the borrowing nation will be weakened financially. Nations, as individuals, should seek to avoid long-term debt whenever possible.