Kansas City Attorneys Offer Insight into Modern Law’s Roots
Those who adhere to Judeo-Christian beliefs may be surprised to learn that modern bankruptcy laws actually have roots in the Bible. Bankruptcy, even in the aftermath of our recent recession, still has certain stigmas in the minds of individuals who are struggling to pay household bills and debt. However, the idea that people should not be imprisoned for debt and allowed fresh starts is much older than US Bankruptcy law. An article from “The Kingdom Economy” sparked our interest in the Bible and bankruptcy, and we wish to explore these ideas from a legal perspective.
Are the Bankruptcy Time Limitations from the Old Testament?
In the Old Testament, there is much discussion about laws regarding borrowers, lenders, and the poor. For instance, in Deuteronomy it says, “At the end of every seven years you shall grant a release. And this is the manner of every release: every creditor shall release what he has lent to his neighbor.” (Deut. 15:1-2.)
In modern bankruptcy law, if you receive a Chapter 7 discharge, you must wait eight years before filing again. This is similar to the language above. However, US Bankruptcy law provides a little more nuance: If, after receiving a Chapter 7 discharge, you still are struggling to pay your mortgage or non-dischargeable priority debt (such as child support or certain tax debts) you can file for Chapter 13 immediately after Chapter 7. (We call this strategy “Chapter 20.”) In Chapter 13 after Chapter 7, you can continue to improve your financial picture under the protection of the bankruptcy court.
Does the Homestead Exemption Have Biblical Roots?
Another interesting passage is in Leviticus: “If your brother becomes poor beside you and sells himself to you, you shall not make him serve as a slave: he shall be with you as a hired servant…Then he shall go out from you, he and his children with him, and go back to his own clan and return to the possession of his fathers.” (Lev. 25:39-41.)
This tells us that people who paid their debts by selling themselves into slavery were eventually freed. Upon their release, their former masters were commanded to bless their servants as God had blessed them, allowing the newly freed slaves a chance to start over on solid ground.
U.S. bankruptcy law contains a practice called a “homestead exemption.” It is not quite the same, since we no longer sell ourselves into slavery to repay our debts. It does, however, keep creditors from taking certain essential property from debtors, no matter how much they owe.
The homestead exemption in bankruptcy allows homeowners to exempt or exclude a certain amount of equity in their homes. Both Missouri and Kansas allow individuals filing bankruptcy to exempt equity—speak to an attorney to learn more about the amount that would be exempt for your specific situation and how to maximize this benefit.
At our office, we see people every day who are stressed and scared about their financial situations. We adhere to the Golden Rule and treat our clients as we would wish to be treated. If you want to know more about your options, contact a knowledgeable bankruptcy lawyer at The Sader Law Firm in Kansas City today.