Debt Claims

All modern economies are based on debt. People and nations are becoming more and more enslaved to debt. The only solution is the government of God.

In a modern society, the government enforces debts on behalf of the creditors (unless the government is the debtor). Governments usually take the side of creditors. They generally do this, even if the debt is unfair and the interest rate is exorbitant. The only escape for a debtor is to declare themselves bankrupt.

In a Kingdom Community, all economic transactions must be voluntary. There will be no state authority with the power to enforce debt contracts and the repayment of debt. The Instructions for Economic Life give no mechanism for making people repay their debts.

Judges can confirm that a debt is owing, but they will not have authority to enforce payment of the debt. This means that repayment of debt will be voluntary. Pressure to repay debt may come from within the community, however the community will only put pressure on debtors, if they believe that repayment is justified.

Under God's system of justice, lenders cannot force borrowers to pay the interest they owe. They cannot force them to repay a loan. Lenders will have to rely on the goodwill of the borrower to get repaid.

All creditors will be reliant on the goodwill of the debtor. Most people will repay their loans because they want to maintain a good reputation. They will usually repay, because they will realise that they might want a loan in the future and do not want to spoil their credit record. Debtors will avoid defaulting so that they continue to be trusted by the people to whom they have made promises.

Realising that they might be a creditor in the future, borrowers will encourage the practice of repaying loans. They will set a good example for other debtors by fulfilling their commitments to repay debts. Paul urged us to repay our loans if we can.

Give to everyone what you owe them... Let no debt remain outstanding, except the continuing debt to love one another (Rom 13:7-8).

We repay our loans because we love, but love does not require us to impoverish our families. If a person cannot afford to repay a loan without plunging their family into poverty, they are not required to pay the loan.

In the Kingdom of God, repayment of debt will always be voluntary. The debtor can walk away from the debt, if they are willing to incur the wrath of the creditor. This takes us back to the teachings of Jesus. He said,

But love your enemies, do good to them, and lend to them without expecting to get anything back (Luke 6:35).

All lending should be done with an expectation that the debt might not be repaid. The effect of this will be a significant reduction in debt levels. Most people will be unwilling to make big loans to others, because it will be too risky.

The only people who lend to those who are poor will be Christians demonstrating the love of Jesus. Most other people will be unwilling to run the risk. Equity financing will become much more important than debt financing.

In the Kingdom of God, creditors lose their power, because there is no government power to enforce the repayment of loans. This shifts control from the creditor to the debtor. This is a huge reversal from the situation in the modern world, where governments protect creditors.

If the money that is owed to a lender is not repaid, there is nothing the creditor can do about it. They cannot make threats of violence to ensure repayment. Goods cannot be taken to cover the outstanding debt. All a creditor can do is go to a judge and make their case against the person who has refused to pay the debt. Judges can confirm that a debt is owing, but they do not have authority to enforce repayment. The judge may pronounce judgment against the debtor but does not have the power to enforce their decision. They can explain their decision to the community, but public disapproval might not be enough to make the person repay the debt.

A community will only put pressure on people to repay a debt if they believe that repayment is justified. If the terms of the debt are unfair, sympathy will go to the debtor, so a creditor would make themselves unpopular by demanding repayment. The community would not support demands for penalty interest, even if the debt contract allowed it.

If a debtor is being impoverished by a debt, the judge will declare that the debt must be cancelled at the end of seven years, so the creditor will not be able to demand repayment. The judge will rule that all the interest charged must be refunded, because charging interest to a poor person is forbidden by God’s law. Judges will only support claims for the repayment of legitimate business loans. Claims by owners of unrighteous wealth for repayment of debt will not be supported by judges. They will declare that money lent by loan sharks has become unrighteous wealth that does not have to be repaid.

In God's Economy, judges applying God’s law will remove the power of creditors. Courts will be reluctant to enforce many debt agreements, so repayment of debt will mostly be voluntary. Debtors will be free to walk away from their debt, because there will be no government forcing them to repay it.

The Kingdom of God will dramatically reduce the volume and frequency of debt.