Is Most Christian Debt Advice Bogus? Here’s What Jesus Would Really Do.

I’ve long hesitated about writing about Christian debt advice. It is a self-righteous can of conflict that I have avoid, like the biblical plague.

But is seems like the ads proclaiming christian debt relief are appearing more and more. Advertisements like:

In the past I have advised many ministers with financial problems, as private clients. I’ll share with you the same advice I have given them that they could not dispute and they found some comfort in because they recognized it to be honest and true.

Most groups proclaiming to offer ‘Christian’ debt advice are really just using ‘holy’ as and advertising tool. What they wind up offering you is the same credit counseling, debt management, or debt settlement programs that everyone else does. Don’t believe me, follow some of the christian debt relief ads you see online and see for yourself.

I am not a biblical scholar so my advice is based on the fundamental tenants of fairness, honesty, and doing the right thing.

I’ll toss out these quotes and let you take them for how you interpret them:

It is my belief that when you find yourself in debt that there is only one way out and that is an approach that is fair and balanced for your creditors. That approach is to pay your creditors back based on their percentage of debt you owe. You don’t need anyone else to do this for you. You can do it yourself.

Let’s say you owe the following debts:

Your total debt would be $14,500 and out of that debt let’s figure out what percentage of the total debt we owe each creditor.

Now let’s take an honest look at our other expenses and determine what we might be able to cut out and reduce in order to free up money to use for debt repayment each month. For some they believe that they should downsize their lavish lifestyle and chose to move to a smaller house, sell the expensive car, hang the clothes on the clothesline instead of using the dryer, buy bulk instead of gourmet, or whatever. I’ll let you decide what you can do.

So after you have made your expense reductions just divide what money you can afford to send each month to each creditor based on their percentage of debt. If you can afford to send $500 a month your payment would be divided:

My major point of contention with the Christian debt companies is that rather than put together a repayment plan that is first and foremost, fair to your creditors, they instead put together one using the credit counseling terms the creditor wants or give preference to a creditor that pays the Christian credit counselor more for helping you.

Up to this point my approach has sounded reasonable, but here is where it can become a matter of faith and trust in your higher power. This is also where many begin to bargain and delude themselves into an alternate path.

Being the fairest you can with what you have requires you to disregard your credit report and forget about your credit score. If the fair percentage of your debt repayment dollars does not meet the creditor minimum payment, then it does not. If you start bargaining with yourself and justifying that you should send a higher payment to one creditor over another to avoid a late fee or negative mark on your credit report, who are you really trying to serve? Yourself.

I hate to pull the old “What would Jesus drive” argument but if Jesus had credit card debt, would he rationalize making payments that were not fair because of his credit report or a late fee or would he try to be the fairest to all in repaying his debts?

“But Steve”, you might be saying, if I do this I might get collection calls. Well if this results in you getting debt collection calls is there any reason why you can’t be kind and honest to the debt collectors calling and treat them with grace? After all they are simply trying to collect on a debt that you promised to repay. Show them the Christian you really are.

Is it not possible for you to find grace and comfort in knowing that you are following your core beliefs in your time of trouble maybe you need to ask yourself how fundamental your core beliefs really are?

In times of problem debt, if you have strong faith, no matter what your religion, and believe in your religious core values then an approach to get out of debt based on love, honesty, fairness and faith is the wisest path to follow rather than one of self-serving interests.

Here is a book that I just read while thinking about this topic. I found it to be exceptional for exploring debt and religious values.

October 2, 2008 | Filed Under Debt Articles | Leave a Comment 

Lenora Asks The Squirrel - “What Should I Do About My Debts?”

Lenora wrote to me and asked:

Dear Get Out of Debt Squirrel,

What should I do about my debts? I am trying to set up a budget, but even with a budget, I can’t make all my payments. I need help now? I have over $23,000 in credit card bills and I want to get free of all of them. My husband thinks bankruptcy is the answer. But I am not sure God wants one to do that. Help!!!!!!!

My Dear Lenora,

While it feels like the walls are closing in on you and that you are living through desperate times, rest assured there is a way through this mess.

It doesn’t really matter what the number is that you owe. What is important is that there is not enough money coming in to take care of the bills.

As you say, even if you take your expenses down to the bare minimum, you still can’t make it from month to month. That is a clear indication that no amount of catching rain water to flush toilets, washing out Ziploc bags or reusing aluminum foil is going to do the trick.

Your husband has mentioned that maybe you should go bankrupt, and maybe you should. After all it is a legal and valid solution for dealing with overwhelming debt.

You mentioned what would God want you to do and I think it would be a mistake to automatically discount bankruptcy as an option simply because of what you think God might want for you. Think about it, she led you here for a reason and maybe that reason was to read this answer and to talk about bankruptcy?

Your options really come down to a few basic choices:

  1. Do Nothing.
  2. Increase Income and/or Reduce Expenses.
  3. Go Bankrupt
  4. Enter a Reduced Payment Plan.

Lenora, it’s not rocket science, just tough, difficult, emotional and gut wrenching. As a furry squirrel sitting on a distant branch the path you should take seems clear. Here is my plan for you.

Lenora’s Plan of Action to Get Out of Debt

  1. First thing I would suggest if you need immediate relief from debt collectors or collection calls and you are not yet ready to go bankrupt is to enter a reduced Payment Plan where you can consolidate your debts.
  2. I would also suggest that either now or as soon as you are ready you should talk to a bankruptcy lawyer. This doesn’t have to be with the intention of going bankrupt but to educate yourself about the realities of what bankruptcy means to you and your husband.
  3. At some point following the meeting with the bankruptcy lawyer or during the early months of your consolidated debt plan you may decide that you can’t continue to make payments and live in the stress and pressure that you are currently in. You might opt for bankruptcy.

The advantages of this approach are that this does not force you to go bankrupt now if you are not mentally ready for it. And it allows you to make a good faith effort to repay your debt based on what you can afford to pay with professional help in the meantime.

Only you can decide if bankruptcy is right or wrong for you. But I ask you to consider this as you say your evening prayers. Lenora, do you have a greater responsibility to fix the past or attempt to fix the future? If you want to fix the future then it just might make more sense to go bankrupt now, get yourself back into a safe position where you can afford to live, and then if you have extra money leftover, you can always repay your creditor for moral reasons.

Going bankrupt does not mean you can’t still honor your debts. It just gives you legal protection and a fresh start, or you can keep living in the past. The choice is yours.

From a squirrel point of view I always prefer to hunt for as many nuts as I can and save them for the winter to come rather than worry about how many I didn’t have last year.

Do You Have a Debt Question You’d Like to Ask?

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March 31, 2008 | Filed Under Ask The Get Out of Debt Expert | Leave a Comment 

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