WHEN DEBTORS JUST WALK AWAY

On Friday the Washington Times reported: Debtors repent by walking away, not by paying off: ‘New frugality’ a deception. Here is the gist of the article.

Although that sometimes painful but virtuous “deleveraging” process has been a boasting point for President Obama and other political leaders looking for positive trends in the economy, a closer look shows that it is not all or even mostly the result of moral rectitude and improved spending habits on the part of the public.

Rather than paring down what they owe, millions of consumers have simply stopped paying the bills, forcing banks to write off hundreds of billions of dollars in mortgages and credit card debts as uncollectible.

Defaulting on the debt, while not as commendable as paying it off, in the end produces the same statistical result once banks charge off the loans: lower debt, lower consumer spending and an increase in cash savings.

There was a time when there was no “walking away” from debt. If the debtor did not pay as agreed, then the debt holder could punish the debtor severely. In still earlier times, the debt holder could enslave the debtor and his family. Such is the reality spoken of in The Parable of the Unmerciful Servant. When the debtor is unable to pay, “the master ordered that he and his wife and his children and all that he had be sold to repay the debt” (Matthew 18:25).

Fortunately for that debtor, his master proved merciful, and he relented, allowing debtor time to repay. Yet this same debtor would not show similar mercy to his own debtors (Matthew 18:30). So his master called him and punished him (Matthew 18:32-34). Thus, this parable reflected the reality of a harsher time.

Has the world changed that much? Can by a government edict all debts be blithely forgiven? No. Even though our government no longer allows debtors to be thrown into prison, someone must pay their debts. In this case, taxpayers, mortgage lenders, and various assorted creditors now eat costly loans. Such cannot continue. Eventually an indifferent attitude towards debt must wreck the lending industry.

Consider that Jesus told The Parable of the Unmerciful Servant to help us understand the concept of forgiveness, using debt as a metaphor for sin. The parable illustrates what Jesus meant by forgiving sins in the Lord’s Prayer. (see Lord’s Prayer in Wikipedia).

Matthew 6:9-13 (Today’s New International Version)

“This, then, is how you should pray:

” ‘Our Father in heaven,
hallowed be your name,

your kingdom come,
your will be done,
on earth as it is in heaven.

Give us today our daily bread.

And forgive us our debts,
as we also have forgiven our debtors.

And lead us not into temptation,
but deliver us from the evil one.’

In The Parable of the Unmerciful Servant, the master expected his debtor to follow his own example of mercy. The master still expected his debtor to honor his obligation to repay (With respect to sin, the equivalent would be restitution and repentance.). Nevertheless, the master showed forgiveness and mercy by setting aside whatever anger he might have felt at not being repaid on time. What the master did not ignore was this debtor’s hypocrisy. He did not allow his willingness to forgive to become an excuse that enabled bad behavior.

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