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Story Time with Drew

In the small town of Hopeville, there lived Emily. She had always been fair with her finances, but a series of unthoughtful choices along with some challenging life events left her facing bankruptcy. As the weight of the situation settled upon her, Emily found herself grappling with feelings of fear and uncertainty. However, she knew that her faith in God would guide her through this challenging season.

With a heavy heart, Emily sought solace in prayer, pouring out her worries and fears to the Lord. She found comfort in the words of Psalm 34:17-18, which reminded her that God is close to the brokenhearted and saves those who are crushed in spirit. Strengthened by this assurance, she resolved to face her circumstances head-on and seek a way forward.

Part 2 of this story will be coming at the end of this episode…

 

I’m Bankrupt. Now What?

Now some of you listening may be thinking, well, I don’t have this problem, and I will redeem my time by not listening anymore to this episode.  I understand that, but if you stay with us, and listen well, I believe that God will connect you someday (possibly sooner than later) with someone that is going through the challenges of bankruptcy, and it will be then that you will be able to speak into them with hope!

Now, some of you that are listening right now, are contemplating the path of bankruptcy.  Also, some of you listening have gone down the road of bankruptcy in the past and you are looking in the rearview mirror at those times.

For those that are facing this challenge, and may even be in bankruptcy right now, what are you to do?  As a believer in Christ, what are your next steps and how are you to handle yourself and the challenges that are before you?



Does Declaring Bankruptcy Make Me a Bad Christian?

We’re all ‘bad Christians,’ All our good works are like filthy rags.

  • In Isaiah 64:6 Isaiah states, “All of us have become like one who is unclean, and all our righteous acts are like filthy rags; we all shrivel up like a leaf, and like the wind our sins sweep us away.”
  • And the Apostle Paul states clearly in Romans 7:18 – “I know that nothing good lives in me, that is, in my sinful nature. For I have the desire to do what is good, but I cannot carry it out.”

The reality is, we’re all in desperate need of God’s grace. Bankruptcy does not, in and of itself, mean that you are a bad Christian. It just means that you have potentially made sinful or foolish stewardship choices which led you to this place. OR, life’s complications and problems have caused a severe financial challenge to you and your family and you are now looking into options to start fresh again.

Bankruptcy is not the unforgivable sin! We addressed 2 episodes ago that bankruptcy is not necessarily sinful, although it can be. You need to know that if you have declared bankruptcy, or if you’re going through bankruptcy, God’s love for you is non bankruptable.

  • Ephesians 1 explains how not only have we been forgiven and redeemed, but we have been chosen by God to be adopted as His sons and daughters. On the occasion of this adoption, we are sealed with the Holy Spirit, identifying us as belonging to Christ and who is a down payment of our eternal inheritance!
  • 2 Peter 1:3 we read that His divine power has given us everything we need for life and godliness through our knowledge of him who called us by his own glory and goodness.
  • We have everything we need. Even if we go through bankruptcy, we have everything that we need! We have Christ, and Christ can NEVER be taken away.

Going through bankruptcy could even be one of the greatest steps of spiritual growth that God works over you to change your character that got you into this mess in the first place. And if you are going through bankruptcy right now, remember that the bankrupt Christian is not a second-class Christian. 

 

Should I tithe, even when going through Bankruptcy?

The better question to ask is this, “why should I not tithe during this challenging time?”

The very simple and clear answer is…Yes. You should tithe. 

Tithing is not contingent on your circumstances. It is about your faith and trust in God that HE will carry you through those troublesome financial times! If at all times in your life you should step out in faith and trust God to be your provider through your tithing, IT IS NOW!

 

Can I Tithe my way out of Bankruptcy?

“If I sow a seed of faith, and God will bless me financially, I need to give more so God blesses me to give out of bankruptcy….”

This is the mindset of some that see that tithing is their way/means out of bankruptcy.  And, this passage is one that is seen as their way out…

  • Mal. 3:8 and following “Will a man rob God? Yet you rob me. But you ask, ‘How do we rob you?’ “In tithes and offerings. 9 You are under a curse—the whole nation of you—because you are robbing me. 10 Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the LORD Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it.”

In the Bible Knowledge Commentary we read about these verses Here “the New Testament speaks about generosity and giving. While not requiring a tithe of believers today, the New Testament does speak of God’s blessing on those who give generously to the needs of the church and especially to those who labor in the Word” (Acts 4:31–35; 2 Cor. 9:6–12; Gal. 6:6; Phil. 4:14–19). (The Holy Bible: New International Version. Grand Rapids, MI: Zondervan, 1984. Print.)

We cannot look at God like a cosmic vending machine. That is, if you and I give to the Lord and His work specifically so that we ‘get’, we are giving with the wrong motive!  And, God know, according to Ps. 44:21 that God knows the secrets of the heart! When we give, the focus needs to be cheerful giving (2 Cor. 9:7) unto the Lord, and this is no matter the circumstance we are in. 

It is important to note that In 2006, Congress added the Religious Liberty and Charitable Donation Clarification Act to The United States Bankruptcy Code! This means that you can legally give unto the Lord’s work even during your bankruptcy days!  Now, you need to give within reason, but in all ways you can (and should) give unto the Lord’s work even when you are in the challenging days of bankruptcy.

 

If you have declared bankruptcy, what do you do?

  • First, you have to acknowledge what got you into this situation. 
    • What faulty ways of thinking, or assumptions, were you making that turned out to be false or unfounded? 
    • Bankruptcy doesn’t actually fix the problem. It only masks the end result of the real problem. 
    • If you are in bankruptcy, and you don’t address the core issues of the heart, you may find yourself back in the same position (but in a worse condition) in the future. 
  • Second, work with an attorney who knows and understands bankruptcy proceedings who will guide you through the process.  Also, it would be a preference that you seek out a lawyer that is a Believer. 
  • If you are married, you and your spouse need to get on the same page with regard to your values for money and the use of debt. This is long overdue!  Start today to pray together about this and hold each other in check about all income and expenses.
  • Give to the Lord’s work!
    • As we mentioned earlier, if you can do a tithe, do so.  If you need to pull back some of your giving to make ends meet, then do so for a period of time.  But, as soon as you can, work your new budget to increase your giving, DO so!  This is a trust issues that you can live as good or better with 90% of your income and 10% to God, than having the full 100% of the income at your disposal

 

You still have to deal with liabilities that were not discharged during bankruptcy

By way of reminder, here are some types of debt that are not discharged during bankruptcy:

  • Taxes: Many types of taxes, including federal, state, and local taxes
  • Student loans: Government-funded or backed student loans, unless you can prove undue hardship
  • Child support and alimony: These debts can’t be discharged in bankruptcy
  • Fines and penalties: Restitution, fines, and penalties imposed by the government
  • Willful and malicious injury: Debts for injury to another person or property
  • Debts left off the bankruptcy petition: Unless the creditor had knowledge of the filing
  • Debts arising from divorce or separation: Such as property settlements
  • Debts related to drunk driving: Such as debts related to drunk driving cases

Remember that when going through Chapter 7 bankruptcy you can discharge credit card balances, medical bills, past-due rent payments, payday loans, overdue cell phone and utility bills, car loan balances, and even home mortgages.

 

Should you liquidate retirement plans to satisfy your moral obligation to pay off debts, even though you don’t owe the debt legally?

Seek to satisfy the moral obligation with cash flow. As a last resort, you can consider liquidating your retirement plans. But again, this is a last resort! Larry Burkett in his book “Money Matters: Answers to Your Financial Questions” says this:

  • “As a Christian, you need to remember that the money you borrow is a moral obligation. And even if you decide to go through bankruptcy, which is not my recommendation, you still need to repay the money you owe. Nothing is impossible. I’ve heard from many couples who were in your situation and yet made the commitment to pay their creditors and not claim bankruptcy. I can’t tell you that it worked out every time, but in many cases it did, even though it took them years to work their way back financially.The most important thing to do in this situation is to pray. You need the Lord’s help. God’s Word says, “Cast your burden upon the LORD, and He will sustain you; He will never allow the righteous to be shaken” (Psalm 55:22).
    • Burkett, Larry. Money Matters: Answers to Your Financial Questions. Nashville, TN: Thomas Nelson, 2001. Print.

Commit to making all payments back. As Larry Burkett states, your moral obligation! Yet, make using your retirement plans as payment to your obligations your last resort. You get the double loss. Loss of continued growth of those monies for your future needs, and loss of withdrawal knowing that most likely you will be paying some sort of penalty for early withdrawal.

 

Suicide or bankruptcy?

Many people see that bankruptcy is the end.  They have dug such a deep hole that they do not ever see their way out of it.  The days are dark, the weight is heavy (all the time) and there seems to be NO end. There may be some listening that you are feeling this deep within your soul! The stress that happens before, and just when you enter bankruptcy could cause you to think, “I’m worth more dead than alive. My family would be better off without me…”

People may feel scared or afraid that they may bring shame to themselves or their families.As you already know, suicide is a very permanent “solution” to a VERY temporary problem. Bankruptcy, as unpalatable as it is, is a better solution to be able to clear the debts and move forward to rebuild your name and character, than to take your own life. 

Keep living my friend!  God is cradling you in His loving arms right now!

And do know, that if you have suicidal thoughts, contact a suicide hotline or a mental health professional. It is as simple as dialing 988 on your phone for the suicide and crisis hotline.

 

Is there life after bankruptcy?

Absolutely YES! Having had a near death experience, many people change the way they live, realizing how close they were to death. Bankruptcy isn’t the same thing, but having such a traumatic experience, one should live differently so that they won’t end up in the same situation in the future. 

Where possible, repay your debts, even though you may not have the legal obligation to repay, the moral obligation isn’t necessarily gone.

 

Stewardship Application

part 2 of the story that we opened up with…

The first step for Emily in her bankruptcy was to confront her financial situation honestly. She consulted a financial advisor who helped her create a realistic budget and develop a plan to repay her debts. Emily knew that it would require discipline and sacrifice, but she trusted that God would provide for her needs.

As news of Emily’s bankruptcy spread, she faced the second challenge of social stigma and judgment. Some people in the community assumed that she had been careless with her finances or made reckless decisions. In moments of hurt, Emily turned to God’s teachings on forgiveness and grace. She chose to respond with kindness and understanding, refusing to allow bitterness to take root in her heart. Through her actions, Emily aimed to reflect Christ’s love, even in the face of judgment.

The third hurdle Emily encountered was the emotional toll bankruptcy took on her. Nights were filled with anxiety and uncertainty, but Emily clung to her faith, knowing that God’s peace surpasses all understanding. She sought comfort in the arms of her church family, who enveloped her in love and prayers. Their support reminded her that she was not alone and that God’s strength would carry her through these very dark times.

The fourth challenge came in the form of adjusting to a new way of life. Emily had to let go of material possessions and reassess her priorities. Though it was difficult, she found contentment in knowing that her new-found worth was not defined by her possessions but by her relationship with God. Emily embraced simplicity, focusing on gratitude for the blessings she still had, such as her health, her loved ones, her church and her unwavering faith.

The fifth and final obstacle Emily faced was the temptation to lose hope. At times, the journey seemed never-ending, and doubt whispered in her ear. However, she clung to God’s promises, holding onto Jeremiah 29:11, which reminded her that God had plans to prosper her and give her a hope and a future!  With each passing day, Emily reminded herself that her current circumstances were not the end of her story but rather another chapter in the grand narrative that God was writing for her life.

Months turned into many years, and Emily’s faith remained steadfast. Her commitment to her financial plan slowly but surely yielded results. With each passing debt repaid, a burden was lifted from her shoulders. People in the community began to witness her unwavering resilience and genuine trust in God, and their perception of bankruptcy started to shift.

In an unexpected turn of events, Emily received a job offer from a nonprofit organization that was dedicated to helping individuals in financial distress. They were moved by her story and saw in her the compassion, wisdom, dedication and faith which was needed to impart into…and impact others’ lives positively. Emily accepted the opportunity with a heart full of gratitude, knowing that God had taken her through the valley of bankruptcy to prepare her for this purpose.

Through her work, Emily touched the lives of countless people facing financial challenges. She not only provided them with practical advice and support but also shared the hope she had found in Christ. Her story became a beacon of light for those who felt lost and hopeless, reminding them that bankruptcy did not define their worth and that God had a plan for their lives.

Emily’s own life continued to flourish. As she embraced her new role, she formed deep connections with the people she served. She discovered joy in making a difference, finding fulfillment in extending God’s love and grace to others. The trials she had faced became the stepping stones that led her to a new life of purpose and significance.

In time, Emily’s financial situation improved significantly. With each milestone achieved, she remained grounded in her faith, acknowledging that her blessings were gifts from God. She continued to be an example of faith, grace, and perseverance, inspiring those around her to face their own challenges with renewed hope…and trust in Christ!

And so, the story of Emily, who declared bankruptcy, became a testament to the transformative power of faith and the unwavering love of God. Her journey from despair to hope, from brokenness to restoration, stood as a reminder that even in the darkest times, God is faithful, and He can bring beauty from ashes (Isa. 61:3).

 

 

Next Steps

 

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