Christian Debt Solutions

So there is this phenomena that's sweeping the U.S. right now. The radio is swamped with advertisements from debt counselors, debt settlement firms, credit repair firms, and even loan modification firms. Realtors are specializing in helping people walk away from houses that aren't worth what people owe on them. Simply put - an entire "industry" has been risen up in the past couple of years around doing something with debt besides paying it.

It is certainly acceptable in our society. For decades we've had federal bankruptcy laws which allowed an individual (or business) to come before the court disclosing total assets and liabilities and making settlement on debts. Generally secured creditors got paid (or the collateral was voluntarily surrendered to the creditor) and unsecured creditors were not paid at all. It has been legal and businesses could budget for the credit losses because they knew the law and knew they could count on the courts to keep it fair.

There hasn't been much debate about whether bankruptcy is a moral issue. Even for Christians, our government seemed to make it acceptable. More than one third of all Americans have filed bankruptcy at least once in their lifetime. (Many have filed more than once.) Statistically, people who identify themselves as Christians don't really look any different either. They have filed bankruptcy, as nearly as anyone can tell, with about the same frequency as anyone else. (Maybe they just carry more guilt and shame for having filed bankrtupcy?)

But Romans 13:8 says that we are to pay our debts. "Let no debt remain outstanding." It seems very clear. And there are other Bible verses, in both the Old and New Testament, which make it clear that we are to do the right thing -- even if it's not covenient, even if it is costly and not in our best interests. Jesus said we are to treat others the way we want to be treated. Quite clearly, the Bible leaves no room for walking away from your debts.

However, I think I could accept some sort of "Christian loophole" for bankruptcy, since it is in submission to the laws of our land and the leaders that God put over us. But I would never encourage it or say it's okay. It would be like a woman having an abortion. It's clearly not Biblical, but the law allows it. I would hope though, that having gone through a bankruptcy or an abortion, the individual in question would have serious changes in the behaviors that got them into this situation in the first place. (If only our government would hold people accountable for that!)

So let's set legal bankruptcy aside and go back to this debt settlement, debt management ... or whatever it is that this so-called "industry" is puporting to do. Just because a lender can be conned into accepting less than the total amount due as a "settlement" doesn't make it right. In fact, it doesn't even make it okay. The Biblical mandate is not to pay our debts when we can, or to pay our debts when it's convenient our fiscally sensible. We are just to pay our debts. End of story.

So if you're a Christian and find yourself swamped with debt you cannot manage, what should you do? I have two recommendations, and neither of them are new.

First, there is a non-profit called Consumer Credit Counselin Service (http://www.cccs.net/). They have chapters in most metropolitan areas around the country. (Look on the web or in any phone book.) CCCS contacts all the creditors, negotiates a payment plan (not a settlement) and provides you with the accountability to stick to that plan. Your debts are all paid in full. It's Biblical. It's ethical. And you'll complete the plan over time, coming out of the plan in solid fiscal shape.

Second, there is a Chapter 13 bankruptcy (http://en.wikipedia.org/wiki/Chapter_13_bankruptcy). This is different from traditional bankruptcy in that the creditors generally get paid. Your finances are reorganized under the supervision and accountability of a federal court. Here again, your debts are typically paid in full. It's Biblical. It's ethical. And you'll complete the plan over time, coming out of the plan in solid fiscal shape. Occasionally the court will discharge some debt. But even that decision is made after a meeting of creditors. (It's a meeting where all your creditors come together to discuss how to work with you.)

Let's be clear here. These yo-yo's that are advertising debt settlement, debt management, credit repair and other such nonsense are leading their victims down some primrose lane of immorality. There is no such thing as a "strategic default" or a "debt settlement." Quite simply, when those things happen --- someone gets screwed!

Any choice that includes not paying all of your debts is unethical, not Biblical and immoral. So don't do it. Choose integrity. You'll be glad you did. The world will be a better place because of it too!

Debt Reduction

It used to just be sleazy advertising by bankruptcy lawyers telling you how to "stop creditors cold in their tracks." And that was pretty easy to disregard. They were usually too cheap to pay for advertising on television, radio or any other mainstream media venues. So such messages were relegated to the back pages of the most innocuous publications. There they appeared along side of the ads for making money at home, making money stuffing envelopes --- or losing weight by eating anything you want.

Today, however, things are different. We are besieged throughout the day, in all of the most respectable of media venues, by advertisements and other "public service" announcements. They're all taking the same basic message and presenting a variety of twists. One I heard the other day called it a "bail out" --- as if it were some official program of the federal government. Others claim they have access to a "secret" that creditors don't want you to know about. Still others claim to be your friend and have unique negotiating skills to make your debt go away.

What is this basic message that they are all packaging with such cleverness? It's a message of personal irresponsibility. It's a message of moral failure. And it's a menace to our society. These debt reduction firms appear to be worse than the bankruptcy lawyers in that they don't purport to do something that our government has legislated (i.e., bankruptcy). Rather they lead you to believe that you have power over your creditors, that you are owed something, that you are a victim, etc. Simply put, a whole lot of innuendo is added to the notion of screwing your creditors.

I've read that something like 33% of Americans have filed personal bankruptcy at some point in their lives. If this statistic is true, it means that at a third of everyone in our country has shirked their responsibility and walked on their debts. Now we can talk all we want about predatory lending, usurious interest rates, hidden credit card fees and other con games played by the lenders. But we are sitting here with ethics that look no better than those of the crooked lenders we want to blame.

The recent "mortgage crisis" in America has been the flash point for this. Our federal government has come out with subsidies and other programs to incent lenders to modify loans, including partial forgiveness of debt, reduction of interest rates, and other measures to "prevent foreclosure." Most would say that the government's efforts haven't worked and that the foreclosure activity is mostly unchanged. I think I know why.

I have worked in the mortgage industry most of my life. I have a great deal of experience and knowledge. I also do a lot of reading, research and observation. For the most part, there is little correlation between the rate of mortgage defaults and unemployment. Rather the closest correlation exists between mortgage defaults and home values. In other words, if someone's house is not worth what they owe on it, they are much more likely to default on their mortgage than if they were unemployed. Did you catch that?

So what's really going on here with mortgages? Well, it's really the same problem that's going on with all personal credit in the U.S. right now. We have the most serious case of moral failure that this nation has ever seen. And for some strange reason, the nation is in denial about that. We continue to expect our government to plug the hold that it creates.

The thing is, there is no such thing as debt reduction ... without payment. Debts are only retired when someone pays them. Maybe you don't want to pay your debts, but it wasn't play money that you borrowed. Someone will have to pay for it. It may be other customers, it may be shareholders, it may be taxpayers. But make no mistake, someone somewhere is paying for whatever debt reduction plan you've just heard advertised on TV or radio.

The Bible has much to say about money and love. Christ followers are to be responsible with their spending, good stewards of their assets and pay what they owe. Moreover, we are to love others as we would like to be loved. As such, there is no room for us to pass our debts on to someone else. Put another way, aside from paying one's bills, there is no debt reduction plan that will be Biblical or viewed by God with any favor at all. Did you know that?

23rd Psalm

Have you ever read the 23rd Psalm? You know, it's the one they always print on the flyer handed out at funerals. Let's take a look.

Psalm 23 says, "The LORD is my shepherd, I shall not be in want. He makes me lie down in green pastures, he leads me beside quiet waters, he restores my soul. He guides me in paths of righteousness for his name's sake. Even though I walk through the valley of the shadow of death, I will fear no evil, for you are with me; your rod and your staff, they comfort me. You prepare a table before me in the presence of my enemies. You anoint my head with oil; my cup overflows. Surely goodness and love will follow me all the days of my life, and I will dwell in the house of the LORD forever."

You know, in these turbulent times, it would be wise for us to consider this Psalm of King David. For you see, it was not written for the dead, but for the living. Let's dissect this Scripture and see what it has in store for us right now.

The Lord is my shepherd ...
He is watching out for me. He cares for me. I follow Him. He keeps me safe.

I shall not be in want ...
He has promised to provide for all of my true needs, and I know that He will.

He makes me lie down in green pastures, he leads me beside still waters, he restores my soul.
God has good plans for me. They include rest and peace. In fact, His perfect will for me is that my life not be ruled by the tyranny of the urgent. Rather He asks me to rest in pleasant places. His path for me is one through peace and not tribulation. And when I am buffeted by life's storms, He restores my soul and renews me. He is my strength.

He guides me in paths of righteousness for His name's sake.
God calls me away from the evil ways of the world. He calls me to do godly things and to righteous living. And as I become more righteous ... He is glorified.

Even though I walk through the valley of the shadow of death ...
The valley of the shadow of death. Yes, that is where I live. It is where I work. It is where I shop. It is where my kids go to school. Bad things happen there. People get hurt. It's where IBM lays off 5,000 people and moves their jobs to India - while making a stellar profit. It's where GM goes bankrupt and the stock market tanks our retirement funds. It's where kids tease my child mercilessly at school, and drunk drivers threaten our innocent lives with their carelessness. It's where drug lords traffic substances that enslave and ruin lives. Yes, this valley of the shadow of death - it is one busy place. But nothing good ever happens there.

I will fear no evil, for You are with me; Your rod and Your staff, they comfort me.
Despite my days in this shadowy valley, stalked by evil on every side and at every turn - I have nothing to fear. The evil cannot harm me, even though it is menacing and intimidating. I can take comfort in the fact that God is with me, and in the knowledge that Christ has already defeated the evil in this valley. God's ways of guiding and correcting me lead me through the valley of the shadow of death successfully. I will be comfortable on the other side. I will look back and see that it was silly to have been worried or frightened. I will be comforted. So I will fear no evil. I will fear no layoffs. I will fear no foreclosures. I will fear no housing slumps. I will fear no tax increases. I will fear no wars. I will fear no loss of retirement savings. I will fear no stock losses. I will not fear old age, poor health or the lack of decent health insurance. For Thou art with me.

You prepare a table before me in the presence of my enemies.
Jesus has gone on ahead, leaving the Holy Spirit to guide, correct and comfort me. Why did Jesus go on ahead of me? To prepare a place in the heavens for me. It is a table of feast, and not famine. It is a table of victory and not defeat. My enemies will walk with me right up to the table - but they will never be seated at that table with me. It is my Father's table. There is no place there for my enemies - even if they think there is. No, the place at that table is reserved just for me.

You anoint my head with oil; my cup overflows.
God has chosen me specifically to be His own. I am ordained, anointed, sacred and holy. He makes it so. The oil is His special blessing, reserved for His people. It calls me out of the ordinary and into the extraordinary. My cup is full of blessings. My life is more blessed than I ever imagined. Certainly I am more blessed than I can comprehend, and more blessed than I really ever could deserve. I am rich.

Surely goodness and mercy shall follow me all the days of my life, and I will dwell in the house of the Lord forever.
God has told us that God knew me even before I was formed in the womb. Even then, He already had a plan for my life. It was a plan for good, and not bad. It was a plan for joy and not sorrow. No, God has chosen me to be His, to be His special blessing. His goodness and His mercy stalk me more relentlessly than the merciless evil that stalks me. They are what overtakes me each day. And my plans are to live with God forever. They are His plans as well.

So you see, it seems rather odd that we find Psalm 23 at funerals. It seems a more appropriate verse for births and baptisms, as it is the psalm for the living. As you walk through your own "valley of the shadow of death" (and we all have them), be mindful of Psalm 23. These intimidating circumstances have a bark that is far worse than their bite. No matter what happens you will be fine if you belong to the Lord. It is His promise. And His promises are true no matter what the state of the economy is or what the politicians and news are wringing their hands over.