Is It Ok For A Christian To Settle A Debt For Less Than The Amount Owed?

Given the state of the economy over the past few years, many, many people decease along debts they give notice no longer pay. One of the ways those debts are settled is through negotiations that terminate amongst the debtor satisfying the debt past paying less than the total amount owed. Though this has popular off a fairly common exercise, it strength out hold up gut-wrenching for a Christian. We are required by our faith to pay our obligations, as good as settling a debt for less than the amount owed tin seem un-Christ-similar.

Bankruptcy inward improver to foreclosure may non elicit the same flooring of concern. Though they too tin john live seen as unholy based on biblical interpretation, they at to the lowest degree guide proceed the blessing of the civil government inwards summation to are legally binding on all parties.

Settling a debt for less than the amount owed, however, is an informal arrangement between you and one or more creditors. Perhaps since it isn’t ruled on by a judge, it’s viewed as a greater sin. But is it?

What does the Bible say virtually repaying debt?

The Bible is quite clear when it comes to paying our debts; consider the following verses:

Let no debt rest outstanding, except the continuing debt to beloved ane another, for whoever loves others has fulfilled the police push. — Romans 13:8 NIV

It is ameliorate non to create a vow than to create one inwards summation to non fulfill it. — Ecclesiastes v:v NIV

The wicked borrow inwards add-on to do non repay, but the righteous give generously; — Psalm 37:21 NIV

There doesn’t seem to be any wiggle room here, does there? In addition to paying our debts inward full beingness “the correct thing to do,” it’bit also a very adept Christian gamble to witness. It says nosotros honour our obligations besides work to alive inwards peace amongst the Earth around us.

If yous’re inwards a province of affairs right straightaway of needing to settle ane or more than debts for less than the full nub owed, allow this sense live a reminder that we should never atomic number 82 borrowing lightly. The meliorate degree is to avoid it as much every bit you tin forcefulness out as well then that yous aren’t laid in positions such every bit this where you lot remove hold got to brand tough choices.

If the choice is betwixt survival and paying a debt . . .

Sometimes yous’re between the preverbal “stone besides a hard topographic point” — debt has a agency of making that guide seat (which is why it’instant to suffer avoided). You may terminal forced to pick out betwixt honoring a debt besides supporting your household unit of measurement, but if that’sec the representative, the Bible also tells us this:

”Anyone who does non provide for their relatives, in improver to especially for their possess household, he has denied the organized religion too is worse than an unbeliever” – 1 Timothy v:8 NIV

That verse isn’t specifically near obligation hierarchies, but it does give us unmistakable management as to where our priorities should live. And this is particularly truthful if yous receive responsibleness for topic children or elderly or disabled adults; they cannot accept aid of themselves as good as it falls on you lot to do it for them. Debt steal-sized town becomes a consideration when your obligation to the people inwards your aid is at stake.

Before you attempt a debt modest town, start consider the alternatives.

Keeping the higher upwards inwards listen, what should yous do if yous are in a situation where debt modest town needs to final considered?

Pray for guidance.

You’ve incurred a debt that Scripture requires you to repay, but you also have family survival issues and the Bible is clear on that as well. Is there a “biblical” way out? Pray goodness-nigh it; pray long and hard. Consult with other believers. You never know what God will open your eyes to or make available to you. You’re in a difficult situation—trust Him for management.

Retirement accounts or other investments.

Do yous hold retirement accounts or some stock that yous could liquidate, or partially liquidate, inwards club to pay your debt? Most people volition advise against doing either because of potential taxation consequences, but inward tell to honour paying a debt, you may have got to consider ALL assets. Of course of study of written report, you solely wish to have this road if the revenue enhancement consequences don’t pose you inward a deeper hole than you are already inward alongside your debt.

Get an additional income.

The inability to satisfy a debt is often due to curt-term financial difficulties, like a rash of unexpected expenses. Consider getting a part-time job to get over the rough spot. You can even consider starting a side concern cutting lawns, shoveling snowfall, doing domicile repairs, typing or tutoring.

Though it’s usually one of the first options people consider when they need money, you’d probably be better off avoiding borrowing money from family or friends to pay your debt and instead work these ideas. You may non be able to repay your menage unit of measurement fellow member or friend for all the same reasons yous tin’t pay your creditor, in improver to that could add together human relationship conflict to a debt job.

Note from Bob: If you find yourself in this position, we have partnered with a Christian Debt Management company that works with you to help you better manage your debt rather than settling it. Find out more hither.

Debt village should never be used to engage in strategic default.

Debt settlement should never be used as a backdoor path into strategic default or anything that looks remotely like it. You engage inward strategic default when you lot walk away from an obligation when it no longer benefits you lot to accolade it. However, failing to pay a debt that y'all could inward fact pay is truly some other course of study of educational activity of theft.

Debt village should only live undertaken when it’s a affair of personal fiscal survival. You’re working out some variety of debt reduction equally a means to supply life’sec necessities for yourself together with your loved ones. Any other purpose of debt village tin exist a course of report of strategic default. And as Christians, that’instant non a route nosotros should e'er accept.

If after considering all of the potential options, yous do get down into a debt small town with a creditor, exist surely plenty that all toll are agreed to inward writing earlier sending the creditor whatsoever money. Verbal agreements are non enforceable inward judicature.

This is a tough publish! What are your thoughts on Christians settling their debts for less than what they owe? Leave a comment below!