We hear lots of talk today about debt. Consumer debt, corporate debt, and the national debt grab lots of headlines and, at this time of the year, are the talk of political campaigns. I read an article this past week from The National Foundation for Credit Counseling that points out how serious consumer debt has become. The article states,
According to the Federal Reserve, outstanding non-secured consumer debt rose from $355 billion in 1980 to $805 billion in 1990; and from $1.2 trillion in 1996 to $1.65 trillion in 2001. Consumer bankruptcy filings increased from 1.2 million in 2000 to 1.5 million in 2001. Credit card debt now averages $8,562 per household. These statistics point to a need to ensure consumers have the tools and information necessary to make better money decisions. (The National Foundation for Credit Counseling, March 21, 2002. http://www.nfcc.org)
I had to call a friend of mine this week to learn what ?non-secured consumer debt? entails and I found out that it is credit card debt. We have $1.65 trillion on our credit cards?isn?t that amazing! There?s a whole lot of spending going on in the good ?ol USA.
Along with the $8,562.00 per person that we are carrying around on our credit cards, much of which is being charged exorbitant interest, there is a rising national debt that adds to the concern. The national debt as of Wednesday was $7.3 trillion and rising by more than $1 billion a day. That?s another $24,904.67 worth of debt per person in America.
This mountain of debt that has piled high upon the shoulders of the average American citizen has come about because we spend what we do not have. We want ?it? so bad that we cannot wait until we save the money to get it. Because we want ?it? so bad?whatever ?it? is?we find all kinds of ways to go ahead and get ?it.? We use our credit cards, and the credit card companies are more than happy to loan us the money, with interest of course.
When we get into financial trouble, or we simply do not make enough money to buy the items we want, whether it is a house, car, or simply another credit card, we can try to talk someone into co-signing with us. I know this routine because I?ve been through it. My dad co-signed with me when I bought my first car and I co-signed with my son Dan when he bought his first car. I have to admit to you that I really had no understanding of all of the ins-and-outs of co-signing with someone on a loan, the future of business is digital, when Dan went to get a loan for his first car he came home and told me that he couldn?t buy the car unless I co-signed with him. Of course I went down and signed the papers and he got the car. I?m so glad that Dan was responsible and made his payments because I?ve learned this week, as I?ve been studying Proverbs 6:1-5, just how devastating this financial arrangement can be to the person who accepts responsibility for another?s debt. Let?s dive into our Scripture for today and see what we can learn.
1 My son, if you have put up security for your neighbor, if you have struck hands in pledge for another, 2 if you have been trapped by what you said, ensnared by the words of your mouth, 3 then do this, my son, to free yourself, since you have fallen into your neighbor?s hands: Go and humble yourself; press your plea with your neighbor! 4 Allow no sleep to your eyes, no slumber to your eyelids. 5 Free yourself, like a gazelle from the hand of the hunter, like a bird from the snare of the fowler. (Proverbs 6:1-5 NIV)
Make no bones about it?Solomon tells his son that he should never, under any circumstances, ever co-sign with a friend, stranger, or mortal enemy. Now to some of you this may sound harsh so let?s take some time to try and understand what was and was not allowed under the law in the Old Testament and why Solomon would give his son this strong counsel.
First, becoming security for someone else was allowable in the Old Testament. Solomon is counseling his son not to get in this kind of arrangement, but we can find illustrations of assuming responsibility for another in God?s Word. Let?s take a look at Genesis 43 where we can see an example. Let me give you a little background on the Scripture we are going to read.
Jacob had 12 sons, Joseph had been sold into slavery in Egypt and he was now the governor of the land, second in command only to Pharaoh. A severe famine had hit Canaan and because of this Jacob had sent ten of his sons to Egypt to buy grain. Jacob had his youngest son, Benjamin, stay behind because he was afraid something bad might happen to him.
When Joseph recognized his brothers he decided it was payback time. Joseph accused his brothers of being spies. They denied the accusation, but Joseph told them that he would keep one of their brothers as a prisoner until they brought their youngest brother to Egypt to prove that they were telling the truth. When the brothers got back home and told their dad what had happened, Jacob was broken. He wouldn?t allow Benjamin to go until finally the prospect of starvation coupled with his son Judah?s guarantee, convinced him to allow Benjamin to make the trip. Read along with me from Genesis 43:8-9 and see what Judah told his dad.
8Then Judah said to Israel his father, ?Send the boy along with me and we will go at once, so that we and you and our children may live and not die. 9I myself will guarantee his safety; you can hold me personally responsible for him. If I do not bring him back to you and set him here before you, I will bear the blame before you all my life. (Genesis 43:8-9 NIV)
This is not the end of the story. Joseph set his brothers up. After they had bought grain and were getting ready to head home, Joseph had his silver cup put in the bag full of grain to make it look like Benjamin had stolen from him. When the brothers headed back home with the grain Joseph sent his men out to arrest them. When they realized that the cup was in Benjamin?s bag they were sick to their stomachs. They all went back to Egypt and pleaded to be Joseph?s slave so that Benjamin could go home to be with his dad. It?s interesting how Judah became the spokesman for the group. He was the one who guaranteed Benjamin?s safety. After Joseph had said that all of the brothers could go home except for Benjamin who had to stay and be his slave, Judah said,
30?So now, if the boy is not with us when I go back to your servant my father and if my father, whose life is closely bound up with the boy?s life, 31sees that the boy isn?t there, he will die. Your servants will bring the gray head of our father down to the grave in sorrow. 32Your servant guaranteed the boy?s safety to my father. I said, ?If I do not bring him back to you, I will bear the blame before you, my father, all my life!? 33?Now then, please let your servant remain here as my lord?s slave in place of the boy, and let the boy return with his brothers. 34How can I go back to my father if the boy is not with me? No! Do not let me see the misery that would come upon my father.? (Genesis 44:30-34 NIV)
Judah had ?co-signed? for Benjamin?s life. He was responsible. He pleaded with Joseph because his guilt was on the line.
There is a group of writings called the Apocrypha, which are not authoritative like the 66 books of Holy Scripture, but which gives us insight into the life of the Jewish people during the intertestamental period between Malachi and the Gospels. One of these writings called, The Wisdom of Jesus, the Son of Sirach (in the Latin Bible it is called Ecclesiasticus), was written by a man who was a native of Jerusalem and wrote his ?proverbs? in Hebrew. His writings were translated into Greek by his grandson some time after 132 B.C.
The book contains many proverb-like sayings dealing with various subjects for the individual, family, and the community in their relationships with one another and with God. The book speaks about friendship, education, poverty and wealth, the law, religious worship, and many other matters which are of great importance for us as we try to understand the religious and social customs of the time for the Jews. In Sirach 29:14-20 we read about becoming ?surety? for a neighbor.
14 A good man will go surety for his neighbour; only a shameless wretch would desert him. 15 Do not forget the favour your guarantor has done you; he has given his life for you. 16 A sinner is careless of his guarantor’s prosperity, the ungrateful forgets his deliverer. 17 Going surety has ruined many who were prosperous, tossing them about in a heavy sea. 18 It has driven the powerful from home to wander among foreign nations. 19 A wicked man in a hurry to stand guarantor in the hope of profit, is hurrying to be sentenced. 20 Come to your neighbour’s help as far as you can, but take care not to fall into the same plight. (Sirach 29:14-20)
You can see from Scripture, and the writings of the Apocryphal Sirach, that taking on the responsibility for another was permissible. Even though something is allowed that does not necessarily mean that it is a good practice for us.
In 1 Corinthians 6, Paul writes to the people in the pew in Corinth about some of the absurd things that are going on among them. Paul then reminds them that Jesus died and rose again to deliver them from such practices. He says, ?All things are permissible for me, but not all things are beneficial.? It is permissible for us to guarantee the debt of a friend, but will it ruin us if our friend, family member, or neighbor defaults on their commitment and we are stuck with the bill? That is the important question.
So, we have learned that it is permissible to co-sign for our friend?s debt. Secondly, it is permissible to take out a loan or to make a loan to another person. I will tell you what was not permissible for God?s people and that was to make a loan with interest. In Exodus 22:25-27, God tells His people,
25?If you lend money to one of my people among you who is needy, do not be like a moneylender; charge him no interest. 26If you take your neighbor?s cloak as a pledge, return it to him by sunset, 27because his cloak is the only covering he has for his body. What else will he sleep in? When he cries out to me, I will hear, for I am compassionate. (Exodus 22:25-27 NIV)
I hope you noticed that God allowed for money to be loaned to someone who was in need. God also allowed for collateral to be kept guaranteeing the loan. The thing I really want us to notice is that if the person making the loan kept his neighbor?s cloak as a pledge he had to return it to him by sunset because his cloak was part of his basic needs for living. This really points out one of the most basic, fundamental differences between loaning money God?s way and the way that money is loaned today.
In God?s economy money was loaned to help someone, not to make money. This is why the Hebrews were not allowed to charge interest on their loans to fellow Hebrews. They could charge interest to foreigners, but it had to be reasonable. The point of the matter was that you didn?t make a loan to your neighbor to put them under your thumb with exorbitant interest, you loaned them money to help them get through a difficult time in life. In Leviticus 25:35-37 we see why God set this standard for helping those who are going through difficult times.
35??If one of your countrymen becomes poor and is unable to support himself among you, help him as you would an alien or a temporary resident, so he can continue to live among you. 36Do not take interest of any kind? from him, but fear your God, so that your countryman may continue to live among you. 37You must not lend him money at interest or sell him food at a profit. 38I am the LORD your God, who brought you out of Egypt to give you the land of Canaan and to be your God. (Leviticus 25:35-37 NIV)
God says, ?You were once slaves and I bought you out.? God is reminding them of the deliverance He provided for them so that they might remember that fact when they were given the opportunity to provide ?deliverance? for someone who is enslaved to debt.
As further support to those who get themselves into financial trouble the Lord instituted the seventh year. In the seventh year all debt was forgiven and people who had fallen on hard times were given a new lease on life. Now, you can imagine what went through the minds of those who were approached to help someone during the sixth year. Some might have been led to withhold the help because they knew the seventh year was coming and all debts would be forgiven right? Right! God addressed this hesitancy in Deuteronomy. Turn with me to Deuteronomy 15:7-11.
7If there is a poor man among your brothers in any of the towns of the land that the LORD your God is giving you, do not be hardhearted or tightfisted toward your poor brother. 8Rather be openhanded and freely lend him whatever he needs. 9Be careful not to harbor this wicked thought: ?The seventh year, the year for canceling debts, is near,? so that you do not show ill will toward your needy brother and give him nothing. He may then appeal to the LORD against you, and you will be found guilty of sin. 10Give generously to him and do so without a grudging heart; then because of this the LORD your God will bless you in all your work and in everything you put your hand to. 11There will always be poor people in the land. Therefore I command you to be openhanded toward your brothers and toward the poor and needy in your land. (Deuteronomy 15:7-11 NIV)
The reason I?ve taken the time to walk us through this is so that we might clearly see that God intended the financial blessings He showered upon His people to not only meet the needs of their own families, but also to help those who were going through a difficult time financially. Loans were made and credit was offered to help people out of a fix, not to further enslave those who were poor.
This is the exact opposite of the purpose of credit and making loans for many lenders today. Today, loaning money and offering credit is all about keeping people in debt and making money. Let me give you a couple of examples.
When Connie and I first got married I worked part-time for a furniture rental store in Lawton, OK. We catered to folks who didn?t have the money to go out and buy a new living room suit or new television. If you signed a contract with us we could deliver your furniture to your apartment the same day and have you living like a king or queen. As little as I understand finances today, I understood them even less back in those days. The longer I worked there the more I began to understand what was happening. You could rent-to-own a new 26 inch television from us, get it the same day, and pay $25.00 a week until Jesus came back. The money folks were paying for their furniture and televisions was unbelievable! The truth of the matter is that the people who purchased a television from us could have bought a 60 inch plasma television set with Dolby Digital Sound with the money they ended up paying for their little 26 inch television when it was all said and done. That my friend is not allowed by Scripture. That is called exorbitant interest. That is called taking advantage of the poor. Some say, ?Well, I didn?t make them agree to the terms. Nobody forced them to sign the contract.? It doesn?t matter?you will still be held accountable for taking advantage of people.
Another illustration that comes to mind is the way that credit companies pray on young, college kids. Those who are in college get credit cards in the mail on a regular basis. They are offered lines of credit that they can?t handle. Yet credit card companies are more than happy to help these kids get overextended at 18% interest.
What we see happening today is not what God intended. You and I are to be debtors to no one. If you are in debt up to your eyeballs then you will suffer in a myriad of ways. Not only will you suffer great anxiety and paranoia concerning those who will come after you, but you will not be able to help others who are going through a difficult time. Paul wrote to those in Thessalonica and said,
11Make it your ambition to lead a quiet life, to mind your own business and to work with your hands, just as we told you, 12so that your daily life may win the respect of outsiders and so that you will not be dependent on anybody. (1 Thessalonians 4:11-12 NIV)
Let?s close out our study today by getting back to the topic Solomon spoke so adamantly about to his son–?Do not put up security or pledge for another.? Solomon mentions this same warning to his son in other places of Proverbs. Take a look at some of these with me.
15 He who puts up security for another will surely suffer, but whoever refuses to strike hands in pledge is safe. (Proverbs 11:15 NIV)
18 A man lacking in judgment strikes hands in pledge and puts up security for his neighbor. (Proverbs 17:18 NIV)
26 Do not be a man who strikes hands in pledge or puts up security for debts; 27 if you lack the means to pay, our very bed will be snatched from under you. (Proverbs 22:26-27 NIV)
Why would Solomon be so adamant about staying out of these kinds of relationships with a friend or neighbor? That?s a great question. The answer is so important for us to understand because we live in a day when co-signing for a friend or family member is so prevalent. The reason Solomon says to stay out of these arrangements is because we will become ?ensnared.? The Hebrew word for ?ensnared? means, ?To lure, set a trap, or be caught by a bait.? The same word appears in several places in the Old Testament. For the sake of time I will share just one instance with you. In 1 Samuel 18:20-21 we see how King Saul set a trap for David.
20Now Saul?s daughter Michal was in love with David, and when they told Saul about it, he was pleased. 21?I will give her to him,? he thought, ?so that she may be a snare to him and so that the hand of the Philistines may be against him.? So Saul said to David, ?Now you have a second opportunity to become my son-in-law.? (1 Samuel 18:20-21 NIV)
Saul wanted to take advantage of David so he offered him his daughter, a noble gesture right? Wrong! Saul wanted to convince David that he was his friend, he wanted to gain his confidence, but he did this so that he could take advantage of him.
Those who would invite you to co-sign with them on a note do so because you are their friend, they trust you, and they value your friendship. We don?t ask an enemy to stand with us on a debt that we are about to incur. We ask a friend or family member, but Solomon says that a friend will become a stranger.
This past week I called Neil Noey who is a loan officer at a local bank and asked him about this Scripture. Neil told me that 78% of the time the person who co-signs for the note is left to pay the note after their ?friend? defaults. Neil also told me that the vast majority of these cases are young people with a grandparent who is trying to help their grandson or grand-daughter. What a tragic reality!
It is good for us to help someone out, but the Bible teaches us that we should not get into situations that can destroy us. There was a man who had a two loans with the bank?one for a car and another for a motorcycle. The man?s son and daughter-in-law came to him to ask him to co-sign a note for her new car. The father-in-law agreed to it and a few months later the daughter-in-law left home for another man. The father-in-law was livid and said that he wouldn?t pay because of what she did to his son. The bank told him that they wouldn?t release his car or motorcycle if he refused to pay the remainder of the note and that it would show up on his credit report. The car was repossessed and sold, but for less than was owed. Therefore the man was stuck with the bill and no car to show for his money.
My friend, Solomon is right. We need to stay out of these kinds of relationships. If you are someone who is looking for a friend to stand with you in a debt you want to take on then I hope your friend will really be a friend and tell you, ?No.? If your friend is truly a friend then they will tell you to save your money until you get enough to purchase the car or make the down payment on your own.
These are just bad arrangements for us to get into. Most of the time, when we use our friends or family members to help us this way, we will lose our friend because we are overextended financially. It is good for us to help others, but if you want to truly help someone in need then do so knowing that if you never see a dime of the loan you made that it won?t hurt you financially.
Taking on the debt of another has been a reality in society for many, many years. Some of those situations have been helpful to those who truly needed help and were humbled by the friend who delivered them, but others were merely taking advantage of another?s kindness.
I am reminded of a time in my life when I had taken on so much debt that I could not have paid it back in ten lifetimes. I was sinking down and there was no possibility of survival, but He stepped in and rescued me. He stood between me and the One to whom I owed it all and paid the price. You may be wondering how I got myself into such a fix? Well, it wasn?t a financial obligation that had me in trouble, but it was my sin. Jesus paid the price and today I am free. I am free! Debt free! He paid the price and set me free! Paul wrote in 2 Corinthians 8:9.
9For you know the grace of our Lord Jesus Christ, that though he was rich, yet for your sakes he became poor, so that you through his poverty might become rich. (2 Corinthians 8:9 NIV)
He became poor so that I might become rich in grace and mercy. Today, I am free, but I still owe a debt of gratitude to my Savior who has rescued me from a debt that I could never have paid. For those of you who are drowning in debt you need to know that He will deliver you also. You may have some friend who can help you get out of financial debt, but you don?t know anyone other than Jesus who can pay your bill for the debt of sin. Won?t you invite Him in and allow Him to pay the price for you as well this morning?