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DEBT

The Bible does not say that using debt is sin, but it does discourage it. Debt is money or possessions which one person is obligated to pay to another. Debt includes money owed to banks, friends, relatives, credit card companies, and finance companies.

What Scripture says about DEBT

Debt is discouraged.

“Let no debt remain outstanding” (Romans 13:8).

Debt is considered slavery.

“The rich rule over the poor, and the borrower is servant to the lender” (Proverbs 22:7). We do not have full freedom to decide where to spend our income if we have obligated ourselves to repay debt.

In the Old Testament:

(1) Debt was a curse for disobedience.

“If you do not obey the Lord your God...all these curses will come upon you...The alien who lives among you will rise above you higher and higher...He will lend to you, but you will not lend to him” (Deuteronomy 28:15, 43-44).

(2) Freedom from debt was a reward for obedience.

“If you fully obey the Lord your God...all these blessings will come upon you...You will lend to many nations but will borrow from none” (Deuteronomy 28:1-2, 12).

Debt presumes on the future.

When we get into debt, we assume that we will earn enough income in the future to pay the debt. The Bible discourages presumption. “You who say, ‘Today or tomorrow, we will go to this or that city, spend a year there, carry on business and make money.’ Why, you do not even know what will happen tomorrow...Instead, you ought to say, ‘If it is the Lord’s will, we will live and also do this or that’” (James 4:13-15).

Repay what is borrowed.

“The wicked borrow and do not repay, but the righteous give generously” (Psalm 37:21). God’s people should pay their debts as promptly as they can. “Do not withhold good from those who deserve it, when it is in your power to act. Do not say to your neighbor, ‘Come back later; I’ll give it tomorrow’— when you now have it with you” (Proverbs 3:27-28).

Some factors that lead to debt

Lack of knowledge: Most people have not been trained to handle money God’s way. Lack of planning and discipline: Many people spend impulsively because they have no written plan or budget to ensure that spending does not exceed income. Indulgence: Some people spend in an attempt to satisfy fleshly desires. Circumstances: Sometimes people use debt when they experience unexpected emergencies, such as an illness or loss of a job.

How to get out of debt

Here are eight steps for getting out of debt.

Pray

In 2 Kings 4:1-7 a widow was threatened with losing her children to her creditor, and she asked Elisha for help. Elisha told her to borrow empty jars from her neighbors. The Lord multiplied her only possession, a little oil, and all the jars were filled. She sold the oil to pay her debts and free her children.The same God who provided for the widow is interested in helping us becoming free from debt. The most important step is to pray, seeking the Lord’s help and guidance.

Accumulate no new debt.

List all your debts and everything you own.

List your debts to determine your current financial situation. Then decide whether you should sell any possessions to reduce debt.

Use a written spending plan or budget.

Develop a written spending plan to ensure that spending does not exceed income.

Establish a repayment plan for each debt.

Most creditors are willing to work with people who honestly want to repay their debt, communicate regularly and follow through.Try to pay off the smallest debts or those with the highest interest rate first. Once you have paid off the first debt, add that payment amount to the regular payment for the second one you want to pay off. Then, when that one is paid off, apply both payments to the next debt and so forth until all debts are paid.

Consider earning additional income.

Many people hold jobs that simply do not produce enough income to meet their needs even if they spend wisely. They may need to earn additional income to stay out of debt.

Reduce spending.

Some people need to lower their spending to get out of debt.

When is debt acceptable?

Scripture is silent on when using debt is acceptable. In our opinion, it is permissible to owe money for your business, for the purchase of a home mortgage, or for education for your vocation. If you borrow for any of these uses, follow these guidelines:Make debt the exception and not the rule.Plan to repay what was borrowed as soon as possible.Create a written repayment plan.

Cosigning

Cosigning relates to debt. Anytime you cosign, you become legally responsible for the debt of another. It is just as if you borrowed the money and gave it to your friend or relative who is asking you to cosign. The Bible discourages cosigning. Proverbs 17:18 reads, “It is poor judgment to cosign another’s note, to become responsible for his debts” (TLB).

Summary

God encourages us to seek counsel before making important financial decisions. “Listen to advice and accept instruction, and in the end you will be wise” (Proverbs 19:20). We seek counsel to get insights, suggestions and alternatives that will aid in making the best decision. The Bible provides several practical principles to help us spend money wisely. It also discourages the use of debt. “Let no debt remain outstanding” (Romans 13:8). The reason the Lord wants us free from debt is because “The borrower is servant to the lender” (Proverbs 22:7), and the Lord wants us free to serve Him.