I’ll disclaim now that I’m not a legal expert or lawyer, so I don’t plan to attempt to explain the legalities around bankruptcy or dive into the differnent types.  Instead, I’ll offer a few links to some online videos I found on the US Courts Bankruptcy website.  They seem to be pretty good overviews of bankruptcy and the processes that surround it.

• Introduction to Bankruptcy
• Types of Bankruptcy

Biblical perspective on paying what we borrow

Beyond the emotional scars and long term impacts of going through this process, the Bible states we are to repay whatever we borrow regardless of how long it takes.

The wicked borrows and does not pay back, but the righteous is gracious and gives (Psalm 37:21).
It is better that you should not vow than that you should vow and not pay (Ecclesiastes 5:5).

Options to avoid bankruptcy

There are a number of options that can be taken to avoid bankruptcy, especially as a Christian that may not be often considered:

Negotiation

I’ve always learned in training and discussions with other counselors to counsel people to not run away from creditors.  In today’s financial climate creditors may be willing to negotiate out of court settlements for debt or reduction in payments.  This is a topic often discussed on the Dave Ramsey show in which Dave sometimes recommends getting an agreement in writing for a pay off amount.

Credit counseling

With a reputable credit counseling organization such as Consumer Credit Counseling Service (a nonprofit service), debt payments can become more affordable.  Although, there are certain fees associated with services and potentially longer terms.  It can be a good option if one can follow the plan and avoid future debts.  Obviously, the key is to avoid the future debts which requires solving the reasons for the debt in the first place.

Sell assets

Although, it’s sometimes difficult to let go of assets such as a home, this can be viable option if the home isn’t upside down.  Short selling can also be an option which leaves one with debt, but a lower amount.

Financial Counseling

A financial counselor, such as a Money Map Coach can help with setting up a budget and reviewing spending decisions that may be impacting the ability to make payments.

Final thoughts

These are just a few options in which I hope someone may consider pursuing versus bankruptcy.  Some may still choose to file bankruptcy as the only remaining option.  If this occurs, the person should make the commitment (even if long-term) to repay what was borrowed.

Can you think of other options to avoid bankruptcy?

Coaching is free

Unlike many coaches and counselors, the services a Money Map coach provides are absolutely FREE. Some find this hard to believe, but it’s true. Most Money Map coaches are performing services as a ministry to help people with their finances and to teach them what scripture says about managing money from a stewards mindset.

Money Map Coaches are not employed by Crown Financial Ministries. They are volunteers who have most likely paid for their own training and operate under the authority of their local church (approved by their pastor) so that Crown can insure coaches are following Biblical principles in their teaching.

Topics not covered

Topics like investing, insurance, financial planning, and other related areas are not covered, other than to include these categories in a written spending plan when needed.

Financial counseling services

Below is a list of all the services Crown Money Map Coaches offer participants:

• Get a true financial picture of your situation and current state of your finances. For example, some people may not be aware their housing expenses are too high and are making it difficult to have money for other important budget categories.
• Create a spending plan with common spending categories and use percentage guidelines to determine if spending categories are out of balance with common benchmarks.
• Start tracking spending and measure spending against a spending plan to actively manage your finances.
• Learn the value of a freedom account and how to set it up to plan for future expenses that don’t occur each month.
• Help create a debt reduction plan and determine your debt free day.
• Learn Biblical financial principles about stewardship, debt, giving, saving, spending, family, work and more.
• A coach can also be helpful when individuals or couples aren’t experiencing immediate issues, but need to speak to someone about financial decisions such as buying a car or a house.

If you’re thinking about exploring financial counseling check out the below links to get more information about finding a Money Map Coach in your area, or talking to a coach on-line.

Money Map Coach Resources

• Locate a Money Map Coach
• What to Expect