What is the Christian to do who finds himself in too much debt? What is the right thing to do? Is bankruptcy a proper solution? What about a consolidation loan to reduce the payments? Or how about refinancing? Is there a better option?
As Matthew 6:12 tells us, "Forgive us our debts, as we also have forgiven our debtors." It is the Christian thing to forgive. Bankruptcy is a great example of forgiveness. But even when sin is forgiven it has consequences. So does bankruptcy. Late Christian financial teacher Larry Burkett counseled that bankruptcy was an option, but only in extreme situations. And even then it is legal protection but the debts should still be paid. Bankruptcy has been a quick fix for many. But it's not the best solution.
Consolidation loans are attractive to many people struggling to keep up with multiple debts, each with different minimum payments, due dates, terms, and frustrations. Having just one payment and only paying it once per month can help some people. But without financial discipline the other sources of credit may be used again and more debt incurred. If you do go this route, do not cancel any credit cards. Doing so may lower your FICO credit score by increasing the ratio of debt to available credit.
Do you own a home? Have you ever refinanced? What did that cost you? Maybe $3000? $5000? Probably a lot more. Here's why: If you had 23 years left on your mortgage and then you refinanced it to 30 years you just reset the clock. You started the 30 years all over again. Maybe you got some needed cash or a better interest rate. But what was the real cost? What is your monthly payment? How many years did you add on to what you had before? Can you see how the refinance cost much more than $5000? Banks put a lot of interest on the front of a mortgage. It takes about 21years to pay one half of a 30 year loan. Starting those 30 years over again at any point is not something to be taken lightly.
So is there a better way to control your debt? Is there a way to get out of debt sooner and reduce the interest you pay? I agree with L. Spencer, author of "Getting Out of Debt God's Way", there is a better way to manage your money, reduce debt, and build wealth. It involves paying every debt, not bankruptcy; no new loans; and no refinancing necessary.
The company that provides this program is not a "Christian" company but many people within the company are Christians. Their clients use this program to get control of their finances with little to no change in their lifestyle. Because this program pays down the debts faster the user can be a better steward of what they have. I think it is the best of all Christian debt solutions.
The author suggests seeking legal and financial council when appropriate. The results of the program above vary according to your personal financial situation and how closely you follow the instructions. Learn more about the author at http://www.steveorris.com
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