In a very real sense, bankruptcy is about forgiveness. It is a way for the borrower to pay their debts, either in part, as in Chapter 7 bankruptcy, or over time through Chapter 13 bankruptcy. Surprisingly for some, there is support within the Bible for such generous acts.
For example, Deuteronomy 15: 1-2 says the following:
At the end of every seven years, you shall grant a release. And this is the manner of the release: every creditor shall release what he has lent to his neighbor. He shall not exact it of his neighbor, his brother, because the Lord’s release has been proclaimed.
Now, in truth, these verses are talking about the year of Sabbath, which occurred every seven years, but the idea of creditors forgiving their debtors is not without merit, even in this modern day.
Of course, the act of forgiving a debt does not mean that someone should borrow indiscriminately, and without a plan. There are numerous versus within the Bible extolling the virtues of borrowing money responsibly.
For example, in Psalms 37:21:
The wicked borrows but does not pay back, but the righteous is generous and gives;
Furthermore, in Romans 13:8, a Christian is encouraged to:
Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law.
Also, in Ecclesiastes 5: 4-5, the importance of a vow or promise to repay a debt is illustrated:
When you make a vow to God, do not delay in fulfilling it. He has no pleasure in fools; fulfill your vow. It is better not to vow than to make a vow and not fulfill it.
Based on these verses, and others found throughout the Bible, the borrower is obligated to repay his debt, in full, under the criteria of the original loan. While this might seem to exclude filing bankruptcy, it does not. Filing Chapter 13 bankruptcy does not mean that your debts are forgiven; it only means that the debt will be repaid over a longer period of time.
The Bible does not forbid bankruptcy, and does offer instances of debt forgiveness, but it is important to realize that borrowing and paying debts in a responsible manner should be a goal of any Christian.