Is it a Sin to be in Debt?
by Jeffrey W. Hamilton
An article in the paper caught my eye. "For some Christians, it's a sin to be in debt." As I continued to read, the author admitted that only a few "hardliners" say owing money is morally wrong. The verses they used to justify their belief were Romans 13:8, which says to owe no man anything but love, and Proverbs 22:7, which says debts put other people in control of your life. While I agree that being in debt is not the best circumstance within to find yourself, can we say that being in debt is a sin? Two verses were cited, but there are other verses regarding debts that need to be examined.
God clearly warns us not to go into debt or cosign a loan unless we are certain we can repay our obligation (Proverbs 22:26-27). You must conclude then that some debt is allowed. You can owe money to other people and not be in sin. However, debt carries a responsibility - you must repay your debts. Think about it, borrowing money is a promise to the lender to return the borrowed money. All promises must be kept.
The Old Law also stated that anything borrowed had to be returned in good shape. We think of debts in the form of monetary obligations, but debt comes in many forms. When you borrow your neighbors tools or a cup of sugar, you are incurring a debt to return what was borrowed. Hence, incurring a debt is not a sin.
While being in debt is not a sin, Romans 13:8 tells the Christian to avoid being in debt. Sinners borrow from others and never return what they borrowed (Psalm 37:21). Christians should not besmirch the name of Christ by being a deadbeat.
Our reputation is on the line whether we directly borrow from someone or become the guarantee on a loan to another person. Solomon warns us not to cosign for a stranger (Proverbs 11:15). You have no assurance that you will not be left holding the bag. Cosigning is the worst form of debt. You take on the responsibility for repayment, but you have no control over the debt. For this reason, cosigning for a friend is also a poor decision (Proverbs 17:18). If you have already cosigned for someone else, Solomon recommends getting out of the obligation as quickly as possible (Proverbs 6:1-5). Cosigning for a friend is a quick way to turn friends into enemies.
If being in debt was a sin, then lending money to others would also be wrong. However, Jesus tells us to be willing to lend (Matthew 5:42). The Old Law told the Israelites not to be stingy when lending to other people (Deuteronomy 15:18). Similarly, Jesus told his followers to lend without expecting repayment (Luke 6:34-35). While we are to be willing to lend, it does not mean we have to be a pushover for every bum with his hand out (Proverbs 20:16, 27:13). If being in debt was a sin, then lending would be causing others to sin. Obviously, this line of reasoning is false.
We do have obligations when we lend to others. A follower of God must be careful not to cause hardship on the borrower. Under the Old Law, an Israelite was not allowed to charge interest on a loan to the poor (Exodus 22:25). Other people could be charged interest, but the righteous was not to charge an excessive interest rate. They were also restricted from using a necessity, such as a person's cloak, as a surety against a loan (Exodus 22:26-27). Since a person must earn money to repay a loan, it was not right to hold that person's tools as a surety (Deuteronomy 24:6). It is the wicked who try to make a killing through unjust loans (Proverbs 28:8).
Being in debt is not a sin, but a prudent man will incur debts sparingly and carefully. Cosigning should always be avoided, not because it is sinful, but because it is an unsound financial practice. When we lend to others, we should do so wisely and generously.