Debt Problems

Over the years we have worked with hundreds of bankers throughout the Southeast. One thing I learned very early was that all bankers are not created equal. Some are brilliant financial people who handle their customers’ money (as well as their own) with skill and expertise. Others may be skilled bankers—but they aren’t very adept at managing their own assets.

I learned about just such a situation during an informal meeting with the president of one of our banks several years ago. President Jones was worried about what to do with Robert, one of his senior vice presidents. Robert was a great guy who appeared to the outside world as a man who really had it all together. He was handsome and talented, respected by his peers and the community, a loving family man—in general, he was a good old soul. But on this particular day, Jones was worried about a personal difficulty that was interfering with Robert’s professional responsibilities. He feared this burden might destroy Robert’s career. What was Robert’s problem? It was too much personal debt. Jones explained that Robert had gotten involved in a number of leveraged real estate deals that had not worked out. Now he was drowning in debt. Jones simply didn’t know what to do about the problem. After all, Robert was a banker himself. He understood things like money, debt, and leverage. He knew better than to get in to such a predicament—but here he was.

You’re Not Alone

I shared this story because I want you to know that debt problems don’t just happen to uneducated folks. Bright, suave, business tycoons and financiers fall into the debt trap. Borrowing, and the associated problems it can bring, affects people in all walks of life. Today, if you’re struggling with debt, I want you to know that you’re not alone—not by a long shot. Total household debt in America topped 100% of total disposable income for the first time in 2000. At over one trillion dollars per year, we are now spending more on credit cards than we are with cash! The average credit card holder’s balance is $4,400.

Is It Wrong To Borrow Money?

This is the first question I want to address because there is a lot of confusion (especially among Christians) about the whole issue of borrowing and debt. Today, many Christians believe that the Bible teaches that borrowing is a sin. Despite their good intentions (and, best efforts) I don’t think they can prove their point biblically. Some people have turned to a comment that Paul makes in Romans 13:8 to make their case, “Owe nothing to anyone except to love one another…” However, a closer reading of this passage makes clear that the apostle is encouraging the Christians in Rome to be good, obedient, honest citizens. Specifically, he is telling them to pay their taxes as they should. He sums up by telling them to pay their taxes honorably and “owe nothing to anyone.” I simply disagree with those who would point to this verse as a prohibition to borrowing money. If anything, it seems to support the idea that Christians should always fulfill their debts and live up to their obligations.

But, again, all of this should not obscure the most important point: While the Bible may not prohibit all forms of borrowing, there are plenty of peripheral teachings that should cause one to think hard before getting into debt. There are two questions to ask before we borrow:

1) What are my motives? Is it true need—or, is it greed? Am I trying to impress someone else by presenting an image that I can’t afford to pay cash for? Remember, according to Scripture, the very essence of sin revolves around a form of pride that attributes to one’s self the honor that belongs to God. Paul said it this way,

“Do not be conformed to this world…For through the grace given to me I say to every man among you not to think more highly of himself than he ought to think, but to think so as to have sound judgment, as God has allotted to each a measure of faith.” (Romans 12:2a, 3 NASV, emphasis mine)

Sometimes we borrow money when we should seek God’s help. As Christians we serve a mighty King who is more than able to supply all of our needs. I have to confess that there have been far too many times in my life when I have tried to solve my problems in my own strength rather than waiting for God to help me. Borrowing money may be a short-term quick-fix to a long-term problem that could be best dealt with through prayer and mentoring from more mature Christians.

2) Can I repay this loan? The most fundamental question any Christian must answer before he or she makes a loan is, “How will I repay the money I am borrowing?” The Psalmist says this, “The wicked borrows and does not pay back.” (37:21) One of the worst black eyes the church gets is from Christians who don’t honor their debts.

The book, No Debt No Sweat! goes into further detail:

• A Good Rule of Thumb: Don’t Borrow On Depreciating Assets
• What About Bankruptcy?
• The Tale of Two Christian Couples
• When the Situation Really Is Hopeless…
• Credit Cards: Plastic Prosperity or Plastic Explosives?
• The Meal That Takes 20 Years To Pay For
• 4 Tips On How to Use A Credit Card
• Debit Cards: A Sensible Alternative
• How To Get 20% Return On Your Investments
• A Do-It-Yourself Credit Repair Kit
• Being Ready to Travel Light
• Rebuilding Your Credit
• 6 Things You Can Do To Reduce Debt
• What About Credit Repair Companies?
• Are Bill Consolidation Loans A Good Idea?

Click here to learn more about the 19-chapter book, No Debt, No Sweat!