We live in a society where the acquisition of debt has become as American as apple pie. It has not always been this way. For example, in 1900 most homeowners owned their homes outright and those who had mortgages were required to pay 50% down with a 5 year payoff. It was not until after WWII that Americans began to use debt more freely as loan requirements were progressively loosened and lenders were protected by federal laws. At the same time when mortgage debt opportunities expanded and evolved, consumer debt has skyrocketed. The severity of this can be seen from various angles. It was recently reported that 63% of Americans are one paycheck away from financial disaster and cannot deal with a $500.00 emergency and that most adults have less than $1,000 in savings.
How should we think about debt in such an environment, where nearly everyone seems to have plunged themselves into debt? We should turn to the Bible!
The most important questions regarding debt have nothing to do with what the people around us are doing and thinking. The most important questions for Christians are these: What does the Bible say about debt? Is my thinking aligned with the message of Scripture?
I have collected my understanding of what the Bible teaches about debt under the following four headings:
I. Debt is not prohibited in Scripture.
II. The absence of debt is praised in Scripture.
III. God regulates the processes of borrowing and lending.
IV. God warns about the dangers of debt.
I. Debt is not prohibited in Scripture
You will not find a Bible verse that declares, “thou shalt not go into debt.” It is permitted and therefore, it is not necessarily sinful to get a loan. Not only does Scripture permit it, there are many principles, practices and requirements that God gives to govern the practice of both borrowing and lending. However, just because there is not an explicit prohibition, we should not consider the matter closed. There are many things we know are wrong even though there is no explicit command. For example, there is no command against gambling, but most Christians would regard this as a sinful practice.
II. The absence of debt is praised in Scripture
While there are no explicit prohibitions of debt, the Bible does have positive things to say about the absence of debt. For example Moses made it clear that God promised His people that when they obeyed Him they would be blessed in all their work. One of the specific manifestations of His blessings is that His people would be lenders rather than borrowers,
“The Lord will open to you His good treasure, the heavens, to give the rain to your land in its season, and to bless all the work of your hand. You shall lend to many nations, but you shall not borrow” Deuteronomy 28:12.
In this passage, God casts a vision for His faithful and obedient people who would be “the head and not the tail.” One of the manifestations of their strength and leadership is that they are lenders not borrowers.
III. God regulates the processes of borrowing and lending.
1. God’s people were instructed to lend money to strangers. Deut. 29:19-20; Deut. 15:1; Deut. 31:10.
2. God’s people were instructed not to engage in usury with brothers. Most people think of “usury” as punishingly high interest rates. However, usury in Scripture is not charging excessive interest, but rather, charging any interest at all. Ex. 22:25; Lev. 25:27; Deut. 23:19-20.
3. Limits are placed on taking collateral, Deut. 24:10-11. God required that there be a sense of mercy regarding the reclaiming of collateral from those who did not repay.
4. There was an automatic cancellation of debts every seventh year, making it clear that debt was not sin. Deut. 15:1-2; Num. 30:2.
5. Becoming surety for a friend or a stranger is prohibited. Prov. 6:1-3.
6. Vows must be honored. Psalm 37:21 declares, “the wicked borrows and does not repay, but the righteous shows mercy and gives” Eccl. 5:5; Ps. 37:21.
In Romans 13:8, we read the statement, “Owe no man anything except to love one another”. We must acknowledge that this verse is not about borrowing money but rather love which is owed. Therefore, this text should not be used as an argument for prohibition of debt. However, while this passage does not specifically address monetary debt, it has been taken by many to imply how one ought to think of debt as John Gill says:
Moreover, pecuniary debts may be here intended, such as are come into by borrowing, buying, commerce, and contracts; which though they cannot be avoided in carrying on worldly business, yet men ought to make conscience of paying them as soon as they are able: many an honest man may be in debt, and by one providence or another be disabled from payment, which is a grief of mind to him; but for men industriously to run into debt, and take no care to pay, but live upon the property and substance of others, is scandalous to them as men, and greatly unbecoming professors of religion, and brings great reproach upon the Gospel of Christ.
IV. God warns about the dangers of debt in Prov. 22:7
The Bible issues a single specific warning regarding a particular danger of borrowing. Proverbs 22:7 clearly states the nature of that danger, “The rich rules over the poor, and the borrower is servant to the lender.”
While the Bible does not explicitly describe particular dangers of debt in detail, except for Proverbs 22:7, there are many pragmatic reasons we can give from experience. While the Bible does not specifically warn of the dangers listed below, it is clear that there are dangers. Here are a few of them to consider:
Debt is a limiting obligation
The verse makes it clear that debt imposes an obligation. Debt it is an inherently limiting obligation. Options are narrowed.
Debt forces trade offs
The person with debt must make trade offs that prioritize the debt. The Bible is very clear that if someone goes into debt, they must be faithful to pay it. Because debts must be paid, other priorities must be put in secondary or tertiary positions. This is required, since, “The wicked borrows and does not repay, But the righteous shows mercy and gives” Psalm 37:21.
Debt may stifle generosity
One of the most pernicious effects of this is that it has the potential to stifle the generosity. It may inhibit the ability to respond to God’s calling on resources due to the inherent desire to be sure the debt payments can be made.
Debt reveals motives
We should always ask questions that would reveal our motives. First, is it a lack of satisfaction with what God has provided that causes us to acquire debt? Covetousness is often the root of debt. Second, is there an ungodly drive for riches that is the root? The Bible makes it clear that those who “desire to get rich fall into temptation,” 1 Tim. 6:9-11. Third, is the desire for debt an expression of impatience? The opportunity to acquire debt always causes us to consider the issue of timing and delayed gratification. Fourth, debt may be embraced because of unwise presumption, James 4:13-15.
Modern lending institutions are structured to play to our weaknesses in these areas. They enable us to side step principles of God’s timing and delayed gratification under the guise of ‘good business.’
Dangers of Church debt
Debt can easily change the focus of the church so that their chief concern is money. When a church has debt, it becomes a primary concern. The obligation to the debt can easily become the highest obligation. The same can be said for certain kinds of rental agreements.
Further, stories could be told about churches who, because of unforeseen circumstances, were forced into things they would have thought unthinkable because of their debt.
More perniciously, the requirement to pay church debt can stain the conscience of the pastors and cause them to fail in their responsibility to speak - particularly to wealthy church members. It can cause pastors to skirt various issues that might cause people to leave, for fear of the financial consequences of such actions.
What kind of “Slavery,” is referred to in Proverbs 22:7?
What does Solomon mean, when he says “The rich rules over the poor, And the borrower is servant to the lender” Prov. 22:7.
We have heard many quote this famous verse, as a proof that no one should ever have debt. Some use it to proclaim the unlawfulness of debt. Larry Burkett and Dave Ramsey have been some of the better known modern proponents of this use of the verse. Have they carefully and properly analyzed the text? Is all debt slavery the way that the writer of Proverbs understood slavery? Does the text support this interpretation and does the form of slavery that the author is speaking about compare one to one with modern, federally regulated borrowing practices?
As we consider the question we first begin with a survey of the nature of proverbs and how they should be interpreted and the context in which this phrase appears. There are three verses which may be connected in their message that reveal the thrust of the instruction, “7 The rich rules over the poor, And the borrower is servant to the lender. 8 He who sows iniquity will reap sorrow, And the rod of his anger will fail. 9 He who has a generous eye will be blessed, For he gives of his bread to the poor” Proverbs 22:7-9.
When we read the surrounding verses in context, we notice that these quite likely display what happens when people are treated poorly by those in power. In the case of verse 7, the rich and the lender are harsh and ungodly while the poor and the borrower are vulnerable to unfavorable treatment.
As we focus on verse 7, we notice that it is a parallelism comparing the rich lender with the poor borrower respectively. Therefore, the author may not primarily be making a theological statement about debt, but rather how lenders or men in authority and perhaps even ungodly men will enslave others through their lending.
While verse 7 does not demand an ungodly lender, it is possible that the words of 22:7 focus on the causes and effects of the ungodly in their treatment of the poor and the borrower. The well known scholar on the book of Proverbs, Bruce Waltke explains this in his commentary on Proverbs:
“Verse 5 speaks of the perverse and the guarded. Verse 6 speaks of training up a child. Verses 7-9 compare the rich and the lender with the poor and the borrower. These verses reject the dominion of the tyrannical rich over the poor, and verse 9 advances generosity. Verse 7 states the harsh reality that the perverse rich enslave the poor; verse 8, that wickedness will be punished; and verse 9, that the generous will be rewarded.” Garrett notes: “While the wicked sow injustice, the righteous share the end product of their literal sowing and harvesting their bread with the poor.”1
In short, Solomon could be referring to lenders who use their lending in an abusive way. The sin is not in the borrowing, but in the harsh treatment of the rich toward the poor and the lender toward the borrower. Therefore, the central matter in these verses may include the potential ungodliness of the rich person and the lender.
Matthew Poole illustrates this by contending that advantages can be taken by the lender, “he can capriciously act against him in harshness, ‘The rich ruleth over the poor, and the borrower is servant to the lender.’ ‘Ruleth over the poor,’ to wit, with rigour and tyranny, taking advantage of his necessities. ‘Is servant to the lender;’ is at his mercy, and therefore forced to comply with his pleasure. The design of the Proverb is partly to correct this miscarriage of the rich, and partly to oblige all men to diligence, whereby they may deliver themselves from this servitude.”2
Without question, Proverbs 22:7-9 paints a picture of potential danger for the poor borrower. He is speaking of a possible situation that leads to the slavery of the poor person. It may not be universally true, but it may prove to be true in cases where the borrower is actually made a slave.
Similarly, in the previous verse, Proverbs 22:6, the writer speaks of training up a child in the way in which he should go. Poole writes, “This is not to be understood as if this were universally and necessarily true, which experience confutes, but because it is so for the most part, except some extraordinary cause hinder it.3” In this same sense, debt does not always put a person into slavery, any more than all children who are “trained up in he way he should go” are guaranteed to be faithful children… He is speaking of a tendency or a possibility, not an absolute reality. Many of the Proverbs must be interpreted in this manner. They reveal tendencies but not always absolutes.
Modern lending institutions
Those who claim that borrowing implicitly makes one a slave, based on Proverbs 22:7, ought to consider the verse, and compare it to modern lending practices.
One of the key questions is this: What kind of slavery is Solomon referring to? Is he merely referring to an obligation or the more severe consequence of being made a slave? If he is talking about slavery, what kind of slavery is he referring to? Is he referring to the kind of slavery that Solomon’s contemporaries experienced when they defaulted on their loans? In Solomon’s day, there were those who were forced to sell themselves into slavery in order to pay their debts. Is this the kind of slavery that borrowers might experience today?
In our current lending environment there are very clearly defined covenants and remedies that cause both parties to act in integrity. The lender cannot abuse the borrower outside the agreement. The current loan covenants that banks are obligated to maintain by law, have created a lending environment where the borrower does not become a slave, or is thrown into prison. He simply must keep his covenant. If he is not able to keep his covenant, he must turn the property over to the lender. This is not the same kind of slavery the author of Proverbs 22 is addressing.
In America today, those who are not able to pay their bills are not in the same situation as the person in Matt. 18:30 where he would be thrown into prison or his children sold to meet his obligations. Getting a bank loan for a piece of property in America today would never result in a person having to sell himself into slavery to pay the debt as we see pictured in 2 Kings 4:1 and Nehemiah 5:4. These things have been made illegal in our current lending environment.
We can give thanks to God that we live in a society where lending practices are more favorable than the ones we read about in Scripture or those which are ungoverned and subject to whims and inventions. There are various ways that the borrower can minimize the pressures and dangers of borrowing. One way the borrower avoids being a servant, either physically through being bound to his payments or emotionally/spiritually, is obviously to avoid unfavorable loan tovalue ratios. This is achieved through financing with a strong equity component. Avoiding personal guarantees is another way.
It is easy to see how God’s ways for borrowing and lending were very different compared to today. In the Old Testament law, both borrower and lender knew that the debt would be forgiven in seven years (Deut. 15:1-2; Num. 30:2). Perhaps this a demonstration for how the law of God calls for more mercy toward the borrower than most lending arrangements.
Since the Bible speaks so negatively about debt, it should be very carefully weighed or not considered at all. However, it is not unlawful. For example, I do not believe that a church borrowing money from a bank necessarily puts the church of Jesus Christ into slavery. Because borrowing in 21st century America has protections that secure a measure of safety for the borrower and the lender – or at least a protection from the kind of slavery that Solomon is referring to. If the writer of this Proverb were writing today, reflecting on current lending practices, perhaps he might say, “the borrower must pay back the lender and serve his obligation and if he does not he must release the property to him regardless of what he has paid.” In this sense, the property is the actual slave, not the borrower.
Randy Alcorn in his article, “Nine Consequences of Debt,” presents nine pragmatic arguments against debt. He summarizes his perspective in this way,
“Scripture discourages debt. It condemns the misuse of debt and the failure to repay debts (Psalm 37:21; Proverbs 3:27-28). If we take God’s Word seriously, we should avoid debt. In those rare cases where we go into debt, we should make every effort to get out as soon as possible (2 Kings 4:1; Matthew 5:25-26; 18:23-24). The question isn’t, “Why not go into debt?” but why? Unless the answer is extraordinarily convincing, we shouldn’t do it.”
1. Bruce Waltke, (The New International Commentary on the Old Testament), The Book of Proverbs, Chapters 15-31, Eerdmans, p206
2. Poole, M. (1853). Annotations upon the Holy Bible (Vol. 2, pp. 256–257). New York: Robert Carter and Brothers.
3. Poole, M. (1853). Annotations upon the Holy Bible (Vol. 2, p. 256). New York: Robert Carter and Brothers.