Is Bankruptcy The Answer When Deep In Debt

Deep in debt? How do you respond? The easy way out? Bankruptcy? For several reasons, bankruptcy is not the answer to solve deep, seemingly impossible debt problems.

Deep in Debt - Look at Your Attitude, Not Your Credit
Deep in Debt – Look at Your Attitude, Not Your Credit

For followers of Jesus, the Bible teaches to pay what we owe (Psalm 37:21, Romans 13:8). Even so, attitudes and behaviors lead to debt; therefore, these need attention always, not debt. If folks don’t deal with attitudes and behaviors that cause debt, bankruptcy is merely an hiatus before a return to even more debt. So, too, is more money!

I suggest that any approach to tackle debt mountains must start with a proper understanding of effective decision-making. Most folks look at their obvious, visible conditions, and develop solutions, often that overlook the big picture, and lead to more problems. Usually, someone mired in debt tells me she (or he) has to declare bankruptcy because she does not have a choice. Next, she gives facts showing she owes, say, $30,000, has no assets and is on disability. She insists: what else can I do? I must declare bankruptcy.

I suggest in every situation we do what’s right, because that’s fair and will provide the greatest freedom.

Deep In Debt? Do What’s Right

Deep in Debt Do What The Word Says - Repay
Deep in Debt Do What The Word Says – Repay

When deciding, at first, be concerned only with doing what’s right; never let the potential outcome hinder your thoughts and decisions. As a Jesus follower, that means if in debt, do not consider bankruptcy. PERIOD! It does not matter that your circumstance seems impossible and highly unlikely that you will be able to repay; the first decision is you must find a way to
repay. The next decision, not dependent on the first is, how? I will look at this question later.

Deep in Debt? Do What’s Fair

As you decide, consider the Golden Rule: Do unto others as you would like them do unto you. How did you fall in debt? You decided to buy a house, a car, pay bills, and so on; you made those choices. You took credit from someone; why should you decide unilaterally not to repay that person or business? It does not matter that when you borrowed you planned to repay; the reality is, not only is it right, but it is fair that you repay. How? As I said, that’s another matter I will discuss later.

Repaying Your debts Is Freeing

Deep in Debt - Repaying is Guaranteed Freedom
Deep in Debt – Repaying is Guaranteed Freedom

Typically, the effects of the bankruptcy route will linger for seven years. Correctly, you will be considered a high risk debtor, and not have access to regular credit sources. Essentially, the bankruptcy decision will curtail your freedom to choose for many years.

How Do You Repay When You Have Nothing?

Having decided you will repay and will not declare bankruptcy, how do you repay? Here are a few suggested steps:

First, if convicted, confess and repent the mis-use of money?

Second, review your attitudes and behaviors that led to debt and be ready to adjust your life style significantly. This means putting on hold for a few years, eating out, buying clothes, cable and satellite TV, Internet, and non essentials. It means you will be inconvenienced, not your creditors. This will lead you to live on a sacrificial budget.

Third, prepare a material worth statement (net worth statement) showing values of things you owe and things you own. If feasible and you sense you should sell items you own, sell them to repay debt.

Fourth, prepare a debt repayment schedule and discuss with each creditor. If you do not have enough funds to repay debts fully, discuss with creditors, adjustments to principal and interest, if any, they will allow. However, you must stress that you have modified your lifestyle and are living on a sacrificial budget.

Fifth, ask a trusted person of the same gender to hold you accountable to follow the new path.


If you borrow you must repay; however, the greater message is, do not borrow except to buy a home; save to buy other items. If deep in debt, it is important you do what’s right and do what’s fair; these actions provide the most freedom in the future.

© Copyright, 2013-14 Michel A. Bell

Michel A. Bell

Michel A. Bell is a former senior business executive, author of seven books — including his first children's book published in 2022 — speaker, and adjunct professor of business administration at Briercrest College and Seminary. Michel is a Fellow of the Chartered Certified Accountants (UK), holds a Masters of Science in management degree from Massachusetts Institute of Technology and a Doctor of Business Administration honoris causa from Briercrest College and Seminary. He is founder and president of Managing God's Money™ and Stewarding God's Resources.

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