Those who hold the view that the Bible condemns bankruptcy sometimes cite the following Bible verse, namely, Psalms 37:21:
"The wicked borrow and do not repay, but the righteous give generously."
Yet, there are numerous debt forgiveness provisions in the Bible, for example, Deuteronomy 15:1:
the end of every seven years you
grant a release of debts."
Matthew Henry in his famous commentary and commentating on Psalms 37:21, I believe, strikes a proper balance, by stating that:
"The Lord our God requires that we do justly, and render to all their due. It is a great sin for those that are able, to deny the payment of just debts..."
Ability to Pay
If you are able to pay your debts, then you ought to repay them. If you cannot repay any or all of your debts, then you may wish to consider what options are available to you including bankruptcy.
There is a debate whether or not credit card and certain other types of debt are a "just" debt. A debt may be legal, but is it a "just" debt? Take, for example, a payday loan, which prey upon the poor and charge exorbitant interest rates often more than 200% per annum. Is that a just debt? Not in my opinion.
Another example is certain credit card debts where, due to interest and penalties, a person paid back far more than the principal amount that he or she borrowed, yet still owes a sizable balance. Is that just?
Still further, take the situation where a mortgage originator pushes a client into a 10% mortgage so that the originator makes a higher commission even though the client could have qualified for a lower mortgage rate. That is not just.
What about hospitals that charge a person without insurance the full inflated price yet charge 70% less to the government and insured patients?
The above examples are food for thought and for provocative discussion.
The Hebrew word, "rasha", which is translated into English as "wicked", also means "criminal." A wicked borrower is one who, at the time he or she borrows, has no intention to repay the debt, that is, he or she is a fraudulent borrower. Such deceit involves wicked plots (Psalm 37:12) and wicked devises (Psalm 37:7). Therefore, Psalm 37:21 arguably seems to imply a fraudulent borrower who makes false promises.
The Bible admonishes us to keep our promises and pay our debts. However, the Bible also contains debt forgiveness provisions that permit a person to escape the bondage of a lifetime of debt. Therefore, in my opinion, from a Biblical perspective, a Christian ought to pay his debts if he has the means to do so, yet, may, as a last resort, file bankruptcy if it is necessary.