Bankruptcy and The Bible

2 Kings 25: 8-10
8 On the seventh day of the fifth month, in the nineteenth year of Nebuchadnezzar king of Babylon, Nebuzaradan commander of the imperial guard, an official of the king of Babylon, came to Jerusalem. 9 He set fire to the temple of the LORD, the royal palace and all the houses of Jerusalem. Every important building he burned down. 10 The whole Babylonian army under the commander of the imperial guard broke down the walls around Jerusalem.

The Israelites lost everything. Their city was burned, and their first temple was pillared by Babylon in 587 BCE. They then went into Babylonian exile. It would seem that all hope is gone. However, God’s people are not free of disappointment, failure, and tribulations. In fact, we are warned by Jesus himself in John 16:33, “here on earth you will have many trials and sorrows. But take heart, because I have overcome the world.” He sustains us in times of brokenness and hopelessness.

Typically, declaring bankruptcy is one instance that indicates you are financially at a low. Debt has piled up, and now one is unable to pay their obligations. Bankruptcy is a legal process that requires filing for Chapter 7 or 13 in the United States. Chapter 7 is where liquidated property is sold and used to pay off the debt. One must pass the Chapter 7 means test showing that your annual income is below your state’s median or your income is not disposable enough. If you pass this test, there are exemptions in place that allow you to keep items like your 401K or IRA accounts. In chapter 13 bankruptcy, your items are not sold, but you are required to engage in a payment plan. There are also requirements for this type of bankruptcy too.

Long term, bankruptcy affects your credit and will keep you from using credit cards for a while, maybe even years. Declaring bankruptcy is a financial and legal decision that may require a lawyer’s involvement. Bankruptcy is referred to as a “reset button” or a “fresh slate”, and there are plenty of people that have prospered with 95% of chapter 7 cases completed successfully. Chapter 13 success rates vary more. There was a significant increase in bankruptcy filings in 2023. Business filings alone rose 40.4%, while non-business rose 16%.

Many heroes came out of the darkness and despair that was the Babylonian exile: Daniel from the den, Shadrach, Meshach, and Abednego from the furnace, and other Israelites that wouldn’t allow their circumstances to get in the way of their love of God. God has a plan. We may not know or understand it, but His ways are higher than ours.

“Bankruptcy Filings Rise 16.8 Percent.” United States Courts,,31%2C%202023. Accessed 29 Mar. 2024.
“Chapter 13 Success Rate Greater than Credit Counseling Plans.” American Bankruptcy Institute,,from%2040%25%20to%2070%25. Accessed 29 Mar. 2024.
“How Bankruptcy Works.” YouTube, YouTube, 13 Nov. 2019,

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