62 Sermon Illustrations on Debt

John Connally had been governor of Texas, a candidate for President, and made millions in the oil business. Just before he died, he had to file for bankruptcy. He was around $48 million in debt. He kept an embroidered pillow by his side: “It's not a sin to be rich anymore, it's a miracle.” He commented, “Rather prophetic, isn't it?”

During the Vietnam conflict, a young graduate of West Point Academy was sent to Vietnam to lead a group of new recruits into battle. He did his job well, trying his best to keep his men from ambush and death. However, one night he and his men were overtaken by a battalion of the Viet Cong. He was able to get all but one of his men to safety.

The one soldier who had been left behind had been severely wounded, and from their trenches, the young lieutenant and his men could hear their wounded comrade moaning and crying for help. They all knew that venturing out into the vicious crossfire of the enemy would mean almost certain death. But the groanings of the wounded soldier continued on through the night.

Eventually, the endurance of the young lieutenant came to an end, and he crawled out of this place of safety toward the cries of the dying man. He got to him safely and was able to drag him back. But just as he pushed the wounded man into the safety of the trench, he himself caught a bullet in the back and was killed instantly.

Several months later, the rescued man returned to the United States, and when the parents of the dead hero heard that he was in their vicinity, they planned to have him come to dinner. They wanted to know this young man whose life was spared at such a great cost to them.

On the night of the dinner party, their guest arrived drunk. He was loud and boisterous. He told off-color jokes and showed no concern for his suffering hosts. The parents of the dead hero did the best they could to make it a worthwhile evening, but their efforts went unrewarded.

At the end of that torturous visit, the obscene guest left. As her husband closed the door, the mother collapsed in tears and cried, "To think that our precious son had to die for somebody like that." That soldier owed those parents the best that was in him. It was evil for him to give so little thought to what they had lost because of him. Considering the price that had been paid for his life, his ingratitude was beyond comprehension. But we are just like him - Jesus died for us, yet we continue to sin. We fail to reflect on the cost of our salvation.

Robert Tilton is latest ratings favorite among TV evangelists.

Newsweek quote:

"Satan, you demonic spirit, I bind you in Jesus' name.

Loose those finances.

Mountain of bills, be thou removed.

Be cast into the sea.

Go. Go. Go.

La-ba-sue."

Article investigates modern slavery, mostly of blacks in Africa and the Caribbean. Slavery is illegal everywhere but usually takes the form of debt bondage. In Asia many girls are abducted for prostitution and live as virtual slaves. In Pakistan 5 million bonded workers labor in brick kilns. Worker Robin Masih and his family in Lahore make about $3.70 a day making 1,000 bricks. Half goes for paying off loans and the end of each year finds him even deeper in debt. “We’re still living in the time of the pharaohs,” he said. Another brickworker, a barefoot, mud-spattered 14-year-old named Yusuf Masi, traveled to Lahore from a village near the Indian border because he had badly gashed his foot while mixing clay with a hoe. He became a brickmaker at 6 when he assumed his father’s 5,000 rupee ($200) debt – a violation of Pakistani child-labor laws. “Now the debt has grown to 9,000 rupees ($360),” said Masi.

Some of the worst systemic abuse afflicts descendants of the only African slaves to overthrow a government: Haitians in the Dominican Republic. Columbus set up there 500 years ago and promptly put slaves to work building Europe’s first New World colony. Says Casper Geistefer, an American relief worker who has spent a decade on the Dominican Republic’s sugar-can plantations: “It is a corrupt plantation system.” The cheap labor of as many as a million Haitian workers remains critical to the Dominican Republic’s sugar-cane, construction and manufacturing sectors. Most of the sugar plantations are government-owned. In retaliation for outside criticism, in 1991 the government expelled thousands of Haitians. In theory, they can earn $3 a day in the fields, but the cost of rent, food and tools (they must rent their machetes) puts them immediately in debt. They are routinely beaten and if they don’t cut enough cane, they don’t eat at night. They are not allowed to leave. The mayor of one “bateye” broke even only once in 55 years.

Finances can crush many well-meaning Christians.

A friend of mine who is a pastor (Joe V.) grew up in poverty. He determined that his family would never want for anything. Christmas was an especially joyous time of splurging. Unfortunately, his income has never matched his vow of prosperity. In short order, he ran up $5,000 in VISA debt. Creditors began hounding him.

In humiliation, he confessed his financial sins to his church. After the service, a member came up to him. “Pastor, you’ve been a great blessing to me. I’ve never seen a pastor who is so honest and caring. My Christmas present to you is to clear your VISA debt.”

Do I hear any Amens?

No one who is financially bound can be spiritually free. We need to get a handle on debt.

1. The dangers of debt.

2. The first step toward debt: home ownership.

3. Car purchases: a costly error.

4. Overlooking the obvious: scheduling financial disaster.

5. How to get out of debt.

[Sidebar: Credit cards can never be used wisely, but sometimes they can be used less foolishly.]

Sermon in Lord's Prayer series. Forgiveness by God. Luke 7:39-43

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NO TRESPASSING

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I. Presbyterians vs. Baptists.

II. What we owe God.

A. God is holy and demands perfection.

B. We must see ourselves as sinners. Luke 7:39..

C. What we cannot do, God has done.

III. The timing of forgiveness.

A. Future Judgment Day.

B. At conversion.

C. On a daily basis.

IV. Forgiveness is something we need.

A. Our emotional health can depend on it.

B. Pray for it, believe it, accept it.

V. God wants more than a blank slate.

A. He forgives us for a purpose.

B. Confess, then repent.

VI. Searching questions.

Zeroing in on a Trillion

The national debt is more than $3.5 trillion. [Actually, it it much more now] Here is what $1 trillion could buy:

* A 40-hour week paycheck at minimum wage for every person in the world.

* 1991-92 Harvard tuition for every person under 18 in the USA.

* Two weeks at Club Med in Bora Bora, French Polynesia for every person 18 and over in the USA.

* An average-size, in-ground, concrete swimming pool for every home-owner in the USA.

-- USA Today, 7/23/91 p. 1A

Kevin Bales has researched modern slavery. In Uttar Pradesh in India he came across many examples. He writes the following:

When I met Baldev in 1997, he was plowing. His master called him "my halvaha," meaning "my bonded plowman." Two years later I met Baldev again and learned that because of a windfall from a relative, he had freed himself from debt. But he had not freed himself from bondage. He told me:

“After my wife received this money, we paid off our debt and were free to do whatever we wanted. But I was worried all the time — what if one of the children got sick? What if our crop failed? What if the government wanted some money? Since we no longer belonged to the landlord, we didn’t get food every day as before. Finally, I went to the landlord and asked him to take me back. I didn’t have to borrow any money, but he agreed to let me be his halvaha again. Now I don’t worry so much; I know what to do.”.

Lacking any preparation for freedom, Baldev reenrolled in slavery. Without financial or emotional support, his accidental emancipation didn't last. Although he may not bequeath any debt to his children, his family is visibly worse off than unbonded villagers in the same region.

Dennis Rodman, man of many rebounds, hair colors, tattoos and body piercings, was nearly bankrupt before he joined the Chicago Bulls last year, according to next month's {SmartMoney} magazine.

Rodman was more than $1 million in debt - including overdue alimony, car and house payments - because spending sprees and forays to Las Vegas had gobbled up his $2.5 million in salary, the report said.

Glenn Brownstein, {Broke He Didn't Wanna Be} in the {Courier-Journal, }5/21/96, p. D4

Christians make the best financial decisions according to God's plan for their lives when they understand his biblical financial principles.

Effective financial decisions require a thorough understanding of God's perspective, and that understanding comes from studying God's Word and communicating with him. If Christians never ask God's direction regarding investments and other financial decisions, they will never receive an answer.

There are some specific principles Christians need to consider when making financial decisions: Avoid speculation, keep finances current, maintain Christian witness, give -- do not loan, never cosign, avoid indulgence, prepare for decreases, and let peace rule.

AVOID SPECULATION

Christians should seek God's increase for them rather than trying to increase their financial worth through speculative schemes.

Many enticing programs and "guaranteed" moneymaking schemes are not only unethical but also may border on being illegal. Assess every so-called opportunity with your relationship with Christ and don't let others make financial decisions for you. Instead, make decisions in light of your goals, whether the venture is necessary, and whether it fits into God's individual plan for your life. Precondition your attitudes and you'll have gone a long way to avoid speculative "opportunities."

KEEP FINANCES CURRENT

Christians need to always manage their finances on a current basis, making no provision in their financial planning to borrow money beyond their abilities to repay.

If what you want or desire jeopardizes your future financial freedom, forget it. Impulse buying, either investment or consumption, is disastrous to budgets. So, when evaluating purchases or investments, always consider the financial obligation in light of your known income or available funds.

Plan for tomorrow by prudence today; make plans in light of present circumstances, not based on some future event, and maintain the principle of staying debt-free.

MAINTAIN CHRISTIAN WITNESS

Consider every decision, especially financial decisions, on the basis of its effect on the work and reputation of Christ. God must not be backed into a financial corner and called on only during a time of economic crisis. To blindly pursue a course without a directive from God and then depend on him to rectify any resultant financial disasters is not God's will, nor is it according to his plan.

As an example, if you must borrow from non-Christians in order to remain in his will, beware! This course is not according to his plan. "The rich rules over the poor, and the borrower becomes the lender's slave" (Proverbs 22:7).

When Christians deal unfairly or unethically with an individual or business, it is the Christians' witness that will suffer. Therefore, as a Christian you must establish that no matter what the circumstances you will tell the whole truth, keep your vows, make decisions based on God's directive and God's plan, maintain financial honesty and preserve the integrity of Christ in every aspect of your life.

GIVE -- DO NOT LOAN

Christians should avoid lending to those in need if giving to them is possible.

When someone approaches a Christian and requests financial help in order to acquire wants or desires, that request and justification for the request should be seriously questioned. However, if that person is in need and God has directed you to help him or her, then it is your responsibility as a Christian to supply that need.

NEVER COSIGN

To cosign means to pledge personal assets against the debt of another. It doesn't matter whether it is personal or business, Scripture specifically forbids this whenever it speaks of surety or striking of hands.

"My son, if you have become surety for your neighbor, have given a pledge for a stranger, if you have been snared with the words of your mouth, have been caught with the words of your mouth, do this then, my son, and deliver yourself; since you have come into the land of your neighbor, go, humble yourself, and importune your neighbor" (Proverbs 6:1-3).

Of all the portions of Scripture that warn against surety or cosigning, this seems to be the passage that most explicitly warns against it.

AVOID INDULGENCE

Christians must learn to discern the difference between needs, wants and desires in every financial transaction. This applies not only to purchases of material goods but to investments as well.

Before you buy something, determine whether the purchase is a need or desire, then check it against God's principles. Before investing, be sure you know your reason for investing and what you will do with the money if God blesses with increase.

Many Christians get frustrated because they cannot distinguish between luxuries and necessities. Consequently, they seek fulfillment through the same channels as non-Christians and then wonder why they have fruitless Christian witnesses. God wants us to live comfortably, but he does not want us to live lavishly.

PREPARE FOR DECREASES

Being prepared for unexpected decreases in funds is a vital part of keeping financially current. Evaluate all your financial decisions on the basis of what could happen if there was even a small decrease of income or available funds. Could you make adequate adjustments to live within new spending parameters without having to go into debt in order to maintain your current lifestyle?

Do not operate at the upper limit of income or available funds. Instead, make your financial decisions cognizant of the possibility that if there is a sudden drop in income it may be necessary to reduce your current living standards.

LET PEACE RULE

Often, Christians are not responsive enough to God's Word or to his presence to hear him, except through an inner turmoil known as lack of peace.

Many times God uses this lack of peace to provide direction. Accordingly, if he does not give you peace about something, do not become involved. If a quick decision is required, do not get involved. Take the time to think and to pray about any decision, especially financial decisions that will affect your family, and be determined not to make any financial decision under pressure. "It is the blessing of the Lord that makes rich, and he adds no sorrow to it" (Proverbs 10:22).

LISTEN TO GOD'S WORD

Become receptive to God's guidance by becoming familiar with his directives and leadership procedures through the study of his Word and by communicating with him through prayer.

God provides the right direction for those who seek it. Even when you fail to see the right path clearly in the Bible or fail to hear him in prayer, he will never fail to place either an unrest or a peace inside you that will confirm his preferred course and his will.

As Christians, if we will be alert to understanding biblical financial principles and sensitive to God's leading, we usually can avoid financial failures and economic bondage.

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Version by Howard Dayton, Baptist Press 3/16/05:

Christians make the best financial decisions when they are eager to understand God’s biblical directives and follow His plan for their lives.

Every decision believers make requires a thorough understanding of God’s attitudes, and that understanding comes from studying God’s Word and communicating with Him. If Christians never ask God’s direction regarding investments of financial decisions, they never will receive an answer.

The following principles should be considered when making financial decisions.

• Avoid speculation.

Christians should seek God’s increase for them rather than trying to increase their financial worth through speculative schemes.

Many enticing programs and “guaranteed” moneymaking schemes are not only unethical but may also border on being illegal. Assess every so-called opportunity based on your relationship with Christ, and don’t let others make financial decisions for you. Make decisions in light of your goals, whether the venture is necessary, and whether it fits into God’s individual plan for your life. Precondition your attitudes to avoid speculative “opportunities.”

• Keep finances current.

Christians need always to manage their finances on a current basis and make no provision to borrow money beyond their ability to repay. If what you want or desire jeopardizes your future financial freedom, forget it. Impulse buying, whether for consumable goods or investments, is disastrous to budgets. Evaluate purchases or investments by always considering the financial obligation in light of your known income or available funds.

Plan for tomorrow by prudence today; make plans in light of present circumstances, not on some future event; and maintain the principle of staying debt free.

• Uphold Christian witness.

Consider every decision -- including financial decisions -- on the basis of its effect on the work and reputation of Christ. God must never be backed into a financial corner and called on only during a time of economic crisis. To pursue blindly a course without a directive from God, and then depend on Him to rectify any resultant financial disasters isn’t God’s will.

As an example, if you must borrow outside of God’s people in order to remain in His will, beware, because “The rich rule over the poor, and the borrower is a slave to the lender” (Proverbs 22:7).

When Christians deal unfairly or unethically with an individual or business, it is the Christians’ witness that will suffer. Therefore, no matter what the circumstances, tell the whole truth, keep your vows, make decisions based on God’s directive and God’s plan, maintain financial honesty and preserve the integrity of Christ in every aspect of your life.

• Give -- don’t loan.

Christians should avoid lending to those in need. If possible, simply give. When someone approaches you requesting financial help in order to acquire some want or desire, seriously question that request and justification for the request. However, if the person is in need and God directs you to help him or her, then it is your responsibility as a Christian to supply that need.

• Never cosign.

When you cosign, you pledge personal assets against the debt of another. It doesn’t matter whether it is personal or business, Scripture specifically forbids this whenever it speaks of surety or striking [shaking] hands, and warns against it.

“If you have put up security [surety] for your neighbor [or friend] or entered into an agreement [shaken hands] with a stranger, you have been trapped by the words of your lips -- ensnared by the words of your mouth. Do this, then, my son, and free yourself, for you have put yourself in your neighbor’s power: Go, humble yourself, and plead with your neighbor” (Proverbs 6:1-3). (Words added within the text for emphasis.)

• Avoid indulgence.

Christians must learn to distinguish between needs, wants and desires in every financial transaction. This applies both to purchases of material goods and investments.

Before you buy something, determine whether the purchase is a need or desire, then check it against God’s principles. Before investing, be sure you know your reason for investing and what you’ll do with the money if God blesses with increase.

Many Christians are frustrated because they cannot distinguish between luxuries and necessities. Consequently, they seek fulfillment through the same channels as non-Christians and then wonder why they have fruitless Christian witnesses. There’s nothing wrong with living comfortably, but God doesn’t want us to live lavishly.

• Prepare for decreases.

A vital part of keeping financially current is being prepared for unexpected decreases in funds. Evaluate financial decisions on the basis of what could happen if there was even a small decrease of income or available funds. Could you make adequate adjustments to live within new spending parameters without having to go into debt in order to maintain your current lifestyle?

Don’t operate at the upper limit of income or available funds. Instead, make your financial decisions being mindful of the possibility that a sudden drop in income might require that you reduce your current living standards.

• Let peace rule.

Often, God uses inner turmoil, a “lack of peace,” to provide direction. If He doesn’t give you peace about something, don’t become involved, especially when quick decisions are required. Take the time to think and to pray about any decision -- especially financial decisions that will affect your family, and be determined not to make any financial decision under pressure. “The LORD’s blessing enriches, and struggle adds nothing to it” (Proverbs 10:22).

• Listen to God’s Word.

Become sensitive to God’s guidance by being familiar with His directives and leadership procedures, through the study of His Word, and by communicating with Him through prayer.

God provides the right direction for those who seek it. Even when you fail to see the right path clearly in the Bible, or fail to hear Him in prayer, He never will fail to place an unrest or a peace inside you that will confirm His preferred course and His will. Be sensitive to God’s leading and you’ll avoid financial failures and bondage.

Debt is something that we owe to someone else. God’s Word doesn’t say we can’t borrow, but it does warn us against excessive debt, and that’s called surety. Surety is the condition of being in debt without having a sure way to repay.

The way to guarantee that you will be able to repay a debt is if you use collateral. When you borrow money from a financial institution you are required to sign over something of value as collateral that will cover the balance owed in case of default.

Unfortunately, most debt in America is surety –- with inadequate collateral to satisfy the loan agreement. Debt is not the same thing as credit. Having credit means that, as a borrower, you have established a mutual trust with a lender. However, undisciplined and excessive use of credit can quickly lead to debt.

Today, regrettably, almost anyone qualifies for a credit card, even though the limit may be minimal. The problem is that many people use a credit card as a never-ending supply of unseen money. Too often, people find something they want to buy and these plastic cards are pulled out as fast as an Old West gunslinger, as if they will magically produce cash -- but they won’t.

Some estimates tell us that the average American household with at least one credit card has more than $9,000 in credit card debt. Sadly, most people are oblivious to the tremendous cost of excessive credit.

For example, if you wanted to stop using your credit card and pay off a $1,000 credit card debt making only the minimum monthly payment, it could take seven to eight years! That’s because, even though the principal is slightly reduced every month, the interest clock keeps ticking.

The pitch is appealing -- “Easy monthly payments,” but easy for whom? According to the Federal Reserve, consumer debt in America as of January 2007 was $2.2 trillion, and $878.7 billion of that was revolving debt -- most of it from credit cards. At simple interest on the average credit card rate of 12.4 percent, that means this year consumers could pay at least $85 billion in interest for credit card and other revolving debt.

IGNORING GOD’S WORD

Usually, families with financial problems only recognize the symptoms, such as unpaid bills; or the consequences of the symptoms, such as repossession of property. Seldom do they identify the real underlying cause of the problem. Most symptoms of financial problems that families face today can be traced to ignoring God’s financial principles as recorded in His Word.

“Now if you faithfully obey the LORD your God and are careful to follow all His commands I am giving you today, the LORD your God will put you far above all the nations of the earth.” (Deuteronomy 28:1).

God designed His financial principles so we could easily understand them. He intends to free His people from financial burdens, not bind them with unattainable rules.

In an 1865 address before the British House of Commons, Benjamin Disraeli said, “What we do and allow in moderation, our children will allow and do in excess.” That’s an accurate description of the primary cause of the downward financial spiral of many American families today.

So, what are some preventive measures to avoid debt?

The first is an obvious one -- stop borrowing. “The wicked borrows and does not repay, but the righteous is gracious and giving” (Psalm 37:21). Borrowing isn’t God’s best for His people.

Next, start saving. “Precious treasure and oil are in the dwelling of the wise, but a foolish man consumes them” (Proverbs 21:20). Today, spending and borrowing are promoted, and saving is discouraged. God’s principles promote saving for future needs, not borrowing or using credit.

Then, avoid hasty decisions, and ignore the “buy now, before it’s too late” pitches. “The plans of the diligent certainly lead to profit, but anyone who is reckless only becomes poor” (Proverbs 21:5). One of the best disciplines parents can teach their children is to work and save to reach a goal.

While these are simple steps, often excessive indebtedness makes life difficult. That’s why it’s so important to develop and live by a budget -- a financial plan. “Poverty and disgrace [come to] those who ignore instruction, but the one who accepts rebuke will be honored” (Proverbs 13:18).

Christian families that live by sound biblical financial principles will demonstrate financial freedom for their children and help them grow up with the knowledge of how they should live by God’s principles.

With consistent teaching and discipline it could take less than a generation to break the financial bondage under which so many Christians live. And, it would free them to fund the work of the Lord. After all, that’s what Jesus is talking about in Matthew 6:33. “Seek first the kingdom of God and His righteousness, and all these things will be provided for you.”

Remember, those mounting monthly payments aren’t as “easy” to make as they are alleged to be, and being debt free is God’s plan for His people. No one who is financially bound can be spiritually free.

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[Original illustration at this number was added to HolwickID #5279]

Michael Graham, an executive from The First National Bank of Keystone, West Virginia, pleaded guilty to embezzlement and money laundering that led to the bank's failure. He has now been sentenced to more than 12 years in prison and ordered to pay $515 million in restitution -- at the rate of $300 per month. At that rate, and assuming no interest accrues, it will take him more than 143,000 years to pay off the debt.

Over-indebtedness is an all-too-typical woe in today's society. Many Americans are looking for ways out of the debt trap. Where to begin?

1. GET A NEW VOCABULARY. Unless it's paid for, it's not yours. Don't tell yourself, “I own this shirt.” If you owe for it, say, “I OWE FOR this shirt.” Pretty soon, you'll realize it's true! You don't own anything you haven't paid for. And once you grasp that little concept, you'll have begun a very healthy aversion to buying on credit.

2. Recognize that how you handle “LITTLE” MONEY IS A REFLECTION of how you handle “big” money as well. You work fulltime and eat out for lunch. At just $5 a day, you're spending $1,250 each year. If you're struggling with debt, this is definitely one place you can curb your expenses.

3. TARGET A SPECIFIC DEBT. Scattering a little extra payment money here and there leads to frustration -- you need a designated target. Begin with whichever credit card or loan has the lowest balance. Decide the highest amount you can pay each month and stick to this plan until that debt has been paid off. As soon as this is done, choose your next target and begin again.

4. CALL IT WHAT IT IS. People really squirm when I say this, but it's true: look in any ol' Webster's dictionary and you'll find that the synonym for sin is debt. What is sin? Disobedience to God. What does God's Word say? “Keep out of debt and owe no man anything....” (Romans 13:8, Amplified New Testament). Many Christians need their “wanters” turned off! Wants should never be sources of debt. If you want something badly enough, save up and pay for it. If it isn't worth that much effort, you don't want it nearly as badly as you think you do.

5. GIVE GOD YOUR BEST. The tithe isn't an option, nor is it a burden. God's Word promises specific blessings to those who are faithful in giving to the Lord the first tenth of their income. Everyone has heard Malachi 3:10: “Bring the whole tithe into the [church]....” (NASB), but what does the next verse have to say? “Then I will rebuke the devourer for you....” (v. 11). As we faithfully return to God a portion of that with which he has so lovingly blessed us, he shields us from many of the things that can swallow up our finances.

A child of God should never consider whether he can afford to tithe. Contrary to what some folks would have us believe, the Christian life isn't complicated. Would you reward your child for disobeying you? Of course not! But would you love him enough to let him learn from his mistake? If good parenting sometimes requires this of us, is it any surprise that it is also the way the Ultimate Good Parent, our Heavenly Father, sometimes allows us to learn?

6. Once you've named it, DO SOMETHING ABOUT IT. Call me old-fashioned, but I believe that God didn't include a bit of page-filler in his Word. Every bit of the Bible is written for our betterment, to help us know him and live according to his teachings. If irresponsibility has landed you in debt, do what the Bible says: REPENT. You have disobeyed God -- now apologize! And once you've done that, CHANGE. Repentance is a 180- degree turn, not a glance.

The next step? GET ON WITH IT! God forgot it when he forgave it. He's not holding it over your head, and even better, he's the light of freedom that will guide you from the prison of debt.

God often works through other believers. If you're unsure how to begin, first and foremost, pray. Seek the counsel of God's Word; then get hold of some Christian books on finances. And you may want to seek out a believing professional financial counselor to help you develop the plan that will work best for you.

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Doesn't the Bible say, “Neither a borrower nor a lender be”? Well, that might be good common sense, but it's not from God's Word; Benjamin Franklin said it in Poor Richard's Almanac.

Nevertheless, many Christians feel that all borrowing is prohibited, according the apostle Paul's encouragement to the church to “Owe nothing to anyone except to love one another; for he who loves his neighbor has fulfilled the law” (Romans 13:8).

However, Paul was teaching that we are not to allow people to do things for us if we are not willing to do even more for them.

PRINCIPLES AREN'T LAWS

Principles of borrowing appear in God's Word, but it's important to understand that principles differ from laws.

A principle is an instruction from the Lord to help guide our decisions. On the other hand, a law is an absolute. Negative consequences might result from ignoring a principle, but punishment is the likely consequence of ignoring a law of God.

The principle of borrowing given in Scripture is that it's better not to borrow if a loan must be taken with surety. “A man lacking in sense pledges and becomes guarantor in the presence of his neighbor” (Proverbs 17:18).

The law of borrowing given in Scripture is that it is a sin to borrow and not repay. “The wicked borrows and does not pay back, but the righteous is gracious and gives” (Psalm 37:21). This implies that the wicked is able to repay but will not, as opposed to those who want to repay but cannot.

Principles are designed to keep us on God's path so that we can experience His blessings. When we ignore biblical principles it puts us in a state of jeopardy in which Satan can cause us to stumble at any time.

PRINCIPLE: DEBT IS NOT NORMAL

Debt is not normal in any economy and shouldn't be normal for God's people, regardless of how “right” our culture might want it to seem today.

We live in a debt-ridden society that is virtually dependent on a constant expansion of credit to keep the economy going. That is symptomatic of a society no longer willing to follow God's directions. God told His people what He would do if they kept His statutes.

“Now it shall be, if you will diligently obey the Lord your God, being careful to do all His commandments which I command you today, the Lord your God will set you high above all the nations of the earth.... The Lord will open for you His good storehouse, the heavens, to give rain to your land in its season and to bless all the work of your hand; and you shall lend to many nations, but you shall not borrow” (Deuteronomy 28:1,12).

Borrowing is never God's best for His people.

PRINCIPLE: DON'T ACCUMULATE LONG-TERM DEBT

It's hard to believe that a typical American family accepts a 30-year home mortgage as normal today or that it is now possible in some cases to borrow on a home for nearly 70 years.

The need to expand the borrowing base continually forces longer mortgage loans, because expansion through taking on debt causes prices to rise through inflation. As prices rise, mortgages lengthen. Today it requires from 40 to 70 percent of the average American family's total income to buy an average home, even with a 30-year mortgage.

The longest term of debt God's people took on in the Bible was about seven years. During the seventh year of remission, Jews were instructed to release their brothers from any indebtedness (see Deuteronomy 15:1-2). Thus, the only debts that could exceed seven years were those involving non-Jews.

However, only the person who had made the loan was instructed to release the borrower. The borrower could not release himself from the obligation he had made with the lender.

PRINCIPLE: AVOID SURETY

Surety means accepting an obligation to pay without having a guaranteed way to make the payments. The most recognizable form of surety today is cosigning a loan for another person. But surety can be any form of borrowing in which an unconditional guarantee to pay is committed. The only way to avoid surety when borrowing money is to collateralize a loan with property that, if sold, would cover the entire indebtedness, no matter what.

Currently Americans charge in excess of $400 billion annually on their credit cards. At least $50 billion is for annual finance charges, and average monthly balances are carried between $3,000 and $5,800 at interest rates of 12 to 21.5 percent.

These credit card purchases have become the most common form of surety in America today. Christians seldom realize when they enter into a surety relationship (accepting an obligation to pay without having a guaranteed way to make the payments) that what they are doing goes against a biblical principle. In a credit card transaction, one merchant sells a consumer a product and another finances the purchase, unless the credit purchase is with an in-store credit card.

In the event of default on payments, the return of the merchandise to the original merchant does not cancel the debt, because the finance company has no interest in the merchandise that was purchased. Millions of people have discovered the true meaning of surety: when they have no merchandise but they still owe the money for that merchandise.

PRINCIPLE: THE ABSOLUTE COMMITMENT TO REPAY

In this generation, the system of situation ethics, by which acts are judged within their contexts instead of by categorical principles, is widely accepted. So much so that it's easy to rationalize not paying a debt, especially when the product or service is defective or when family financial situations seem to be out of control.

And, unfortunately, many borrowers discover that it's possible for them to accumulate far more debt than they can repay and still maintain the lifestyle they want. As a result, they bail out. In fact, in 2002 a record 1.53 million people chose bankruptcy as a way to postpone or avoid repaying debts, and some estimates say this number could rise 7 percent to 1.65 million in 2003.

Nonetheless, in some cases voluntary bankruptcy is acceptable, but only in the context of trying to protect the creditors, never in the context of trying to avoid payment. A Christian needs to accept the truth that God allows no exceptions to keeping vows. “It is better that you should not vow than that you should vow and not pay” (Ecclesiastes 5:5).

GIVE BEN CREDIT (NOT A CREDIT CARD)

Benjamin Franklin's “Neither a borrower nor a lender be” is good common sense. Yet, remember that God's Word prohibits neither borrowing nor lending, but does give firm guidelines. Borrowing is discouraged and every biblical reference to it is a negative one, because “The rich rules over the poor, and the borrower becomes the lender's slave” (Proverbs 22:7).

The key scriptural guideline for borrowing is crystal clear. When you borrow, you promise to repay. Literally, borrowing is making a vow and God requires that we keep our vows.

“If you will live like no one else, later you can live like no one else,” says Dave Ramsey, author of “Financial Peace” and "Total Money Makeover.” It's a motto Ramsey repeats. But it's a lesson he had to learn the hard way.

At 26, by all appearances, Ramsey was living like no one else. With a net worth of more than $4 million, Ramsey had accumulated in four years what many take a lifetime to achieve. His knack for buying and selling real estate had catapulted him and his wife, Sharon, into success and riches beyond their wildest dreams. They were living the good life. They had traded in the old Pinto for a Jaguar.

But 15 years ago, the bottom dropped out of the real estate market. Banks started calling in his loans and, within three years, the Ramseys lost everything and were forced to declare bankruptcy. The future looked grim.

Sharon, a stay-at-home mom for their three children, remembers those days well.

“You realize that you can give up, or you can stand up and say 'this is a period of life that's difficult but you can do it,'“ she said. “Your prayer life definitely goes up. You have to have hope; you just have to know it's not going to be like this forever.”

Ramsey was faced with a choice: be controlled by money or learn how to control money. By studying biblical principles for money and following the examples of others, Ramsey turned his family's financial situation around. He worked 18-hour days. They shopped consignment shops and garage sales. They sold everything that didn't matter. After three years, they had paid off their debt.

Shortly after finding financial peace for his family, Ramsey counseled a friend over coffee who was experiencing financial problems. He soon began counseling families at his church, which then developed into a Sunday School class.

Fifteen years later, he has helped change the lives of thousands.

“We're able to give a cool drink of water in the name of Jesus,” Ramsey reflected. “We teach somebody how to get out of debt, answer some confusing question and help them get a budget together. In that context, it also gives us a chance to look for what's behind the question -- and many times that's the need for a relationship with Jesus Christ.”

Ramsey encourages people to be debt-free by following what he calls “the Baby Steps”:

Step 1: $1,000 in an “emergency fund.”

Step 2: Pay off all debt utilizing the “Debt Snowball” (except the house).

Step 3: 3-6 months expenses in savings.

Step 4: Invest 15 percent of household income into Roth IRAs and pre-tax retirement.

Step 5: College funding.

Step 6: Pay off home early.

Step 7: Build wealth! (mutual funds/real estate).

Ramsey admits that people find the second step the most challenging.

“People have so much debt to pay off -- it's not hard emotionally, it's actually kind of fun,” said Ramsey, who equates paying off debt like working in the yard. “You know when you mulch the bushes, edge the sidewalks, when you're right in the middle of it, you're dirty, dusty, you're hot. But when you're in the middle of the battle, you know at the end you can step back and say, 'Man, it looks good.’ You can feel yourself winning the same way when it comes to getting rid of debt.”

Today, Ramsey is truly living like no one else, because he made the choice to say no to debt and wrongful spending habits.

“I pray that when it's all said and done, people will see that we did everything wide open,” said Ramsey, when asked about the kind of legacy he'd like to leave behind. “That we loved God wide open and that I loved my wife and children wide open. And that we led people to the Lord by standing on principle and helping them find financial peace.”

How long did it take you to break that New Year's resolution -- to stop credit spending or concentrate on paying off credit card debt? For many, it was only a matter of days. Why?

We are continually bombarded with opportunities to “play” now, pay later. “No payments, no interest, for 18 months!” advertisers shout their enticements.

The Bible is filled with stories of people who chose this deferred plan of payment. One of the most familiar is that of King David -- see 2 Samuel 11. Seeing a beautiful woman, David sent servants to inquire about her. They returned with the news that she was married to one of the king's own soldiers, Uriah.

Here was the red flag that should have stopped David. Here was his chance to repent of having looked with lust upon another man's wife before his thoughts ever went any further.

But instead, David had her brought into his chambers, and the account goes on to relate that Bathsheba became pregnant and David sought to hide their adulterous liaison. He tried to get Uriah to go home to his wife so that it would be assumed he had fathered the child, but the honorable Uriah refused to walk away from his duties as a soldier.

So David ordered Uriah sent to where his army was in the heaviest of fighting, and the king instructed that Uriah's fellow soldiers withdraw and leave him to be killed. The men did as they were told, and Uriah perished. David then married Bathsheba, but even this act didn't solve all his problems.

Nathan, a prophet of God, came to him and confronted him concerning his sin. David repented, but the child born of his affair with Bathsheba became ill and died. All that grief for one single moment of pleasure.

Everything has consequences, and as adults we must take the responsibility for thinking through our choices before deciding to take any action. Ananias and Sapphira (see Acts 5) really impressed their fellow church members when they made a generous contribution from the proceeds of a land sale. However, when they lied about having given the entire amount from the sale, the two were struck dead.

Are you beginning to see a connection? David was into immediate gratification: he wanted Bathsheba. He got her, but he got much more than he bargained for, including the exposure of his sin.

Ananias and Sapphira were into keeping up with the Joneses. Other church members had sold property and given all the money to the church. And who knows? Maybe the other couples could better afford to. But then again, maybe Ananias and Sapphira were just plain ol' greedy. Whatever the case, this couple preferred the praise of men to being honest with God, and their sin was exposed and swiftly dealt with.

Immediate gratification and keeping up with the Joneses continue to be problems for believers today. The mentality is, “If I can have it now, that's all I want to think about. I'll worry about how to pay for it later.”

Thus we find ourselves in a never-ending financial fiasco. What's the solution?

There is no quick fix for mutilated finances. As the old adage says, “A journey of a thousand miles begins with a single step.” You went into debt one single step at a time, and you'll get out one step at a time. Second-mortgaging and rolling balances to other credit cards are like putting a tourniquet on a slashed major artery -- slowing the blood flow will not keep the patient from bleeding to death!

If your debt load is draining your pockets, stop reaching for the tourniquet and go for the stitches!

Five suggestions:

1) Stop using your credit cards -- anything you need a credit card for, a debit card will do with real live cash.

2) Ask the Lord to forgive you for any irresponsibility and to guide you to be a better manager of the finances with which He's blessed you.

3) Trim your expenses. Reduce or cancel your cable or satellite television service; switch your cell phone to an emergency-only package; brown bag your lunch. Remember: The money you save will be your own!

4) Focus on one specific debt. If the regular payment is less than $100, pay double every month. If it's more than $100, add an extra $50 to $100. Don't fluctuate -- choose the maximum you can pay and stick to it until the debt has been resolved; then decide on your next target.

5) Tithe. If you've been giving at least 10 percent to your church, keep doing it. If you haven't been tithing, start now and see God faithfully reward your obedience. (Read Malachi 3:6-18).

*

If you're feeling alone and depressed because you have problems with debt, cheer up -- you're in the company of the (fleetingly) rich and (mostly) famous.

That can be the company of billionaires, as in Donald Trump and Michael Jackson, to start at the top of the A-list.

The Donald isn't hurting too much right now, but a decade ago, Trump was on the brink of going spectacularly bust. His personal liabilities were around $900 million. His three casinos and posh Plaza Hotel were forced into bankruptcy, he lost his yacht and the Trump Shuttle, and Ivana snagged the mansion and $14 million in the divorce.

Happily, Dealmeister Donald says he's now fine, he has a $2.5 billion fortune - although his company still has $1.8 billion in debts and his casinos lost tens of millions in 2003. It's all a question of scale.

For Michael Jackson, though, it looks like Pop goes the King.

Jacko's chained to a $200 million millstone of debt, says a California lawsuit, and he's reportedly trying to stave off bankruptcy, scraping by on a million bucks a month.

Michael's meltdown started to show when his parents, Joe and Katherine, filed for bankruptcy, claiming debts of $45 million and assets of around $400,000.

The Jackson kids Tito, Jermaine, Randy and Rebbie also went bust, but Michael and his songbird sisters Janet and LaToya did nothing, saying they had no part of the family firm.

Others say the King of Pop couldn't help anyway. “Michael Jackson is a ticking financial time bomb, waiting to explode at any moment,” says a lawsuit that seeks to freeze Jacko's Neverland assets.

The company behind the lawsuit says it arranged $230 million in loans for the singer between 1998 and 2000, and he owes them $12 million. The suit says he used much of the money to refinance earlier loans.

On top of his money woes, the singer faces molestation charges, his records aren't selling the way they used to, and he doesn't want to go home to his Neverland ranch since sheriffs 'violated' the place by searching it.

Jacko's solution: he's renting a 37,000 square-foot mansion and cliffside estate for $100,000 a month. If you're down and out in Beverly Hills, you can, it seems, still live well. Just sniff at the debts, and carry on.

Another musical genius, Wolfgang Amadeus Mozart -- arguably the most famous composer of all time -- fell heavily into debt in his early 30s and when he died at age 35, was buried in an unmarked pauper's grave.

He's one of a slew of stars that have struggled mightily with debt, including Lorraine Bracco of “The Sopranos,” musician Elton John, actress Kim Basinger, boxer Mike Tyson, who went through $300 million living lavishly if not wisely, and an early president of the United States, Thomas Jefferson.

Then there's Martha. She's no president, but Martha Stewart is America's domestic queen, and she's also facing big money problems.

The distressed diva must feel she has a bull's-eye on her back. She dumped her ImClone stock the day before it tanked, leading to a federal investigation. If the courts decide she lied to them, she might find herself not only poor, but also behind bars.

Meanwhile, her Omnimedia company's share price has plummeted, costing her around $300 million.

CAN'T WHITEWASH DEBTS

In 1873, Samuel Clemens, better known as Mark Twain, built a large home in Hartford, Connecticut. He hired Associated Artists, run by famous jewelry-and-glass designer Louis Comfort Tiffany, to decorate the home's first floor. But Twain's financial difficulties from a number of failed investments forced him to move his family to Europe 17 years later.

By 1894, Clemens was effectively bankrupt. He began worldwide lectures in an attempt to pay off his creditors and three years later he succeeded by paying all his debts in full.

Actor Burt Reynolds, however, didn't seem to have the same drive to pay off his debts. Reynolds declared bankruptcy in 1996, citing more than $8 million in debts, yet hanging on to his $2.5 million estate in Florida.

While addressing the Senate about the homestead amendment last year, Sen. Herb Kohl said Reynolds was one of many examples of “rich debtors taking advantage” of the system. Wonder what the Wisconsin Democrat would have said about fellow politician, third president of the United States and principal author of the Declaration of Independence, Thomas Jefferson?

MOVING ON DOWN

Jefferson was no stranger to debt. When he left office in 1809, his wine bill alone exceeded $10,000. Add that to his 40-year project, Monticello, a lavish house that boasts 43 rooms and 13 skylights, and you'll understand why Jefferson ended up more than $107,000 in debt.

When he died in 1826, his large estate and all his possessions, including 130 slaves, were auctioned off to pay his creditors.

And then there's the other famous Jefferson.

Actor Sherman Hemsley, better know as George Jefferson from the CBS sitcom “The Jeffersons” which ran from 1975-85, filed for bankruptcy in 1999, owing, among other things, $15,500 in unpaid taxes.

Turning the television star debt dial to NBC, consider Gary Coleman, star of the 1978-86 sitcom “Diff'rent Strokes.” Coleman estimates that he earned $18 million from the show, but says his parents and former manager squandered the money.

In an attempt to raise money in 1999, he sold some of his personal items in an online auction, including his size 4 ½ bowling shoes and some Afro picks. On Aug. 18, 1999, he filed for bankruptcy.

Looking for a better credit card? Check rates in your area.

YOU CAN'T TOUCH THIS DEBT

No tragic saga of child stars would be complete without mention of the two Coreys from the '80s -- Feldman and Haim. Presumably, they made money from the “Call the Coreys Hotline” (a 900 number fans would call and pay to hear messages from Corey and Corey) and their films, yet both Coreys ended up in debt by their 20s.

Haim, the star of 1987 teenage-vampire horror film “The Lost Boys,” filed for bankruptcy in 1997 citing debts including nearly $104,000 to the IRS, $100,000 in state taxes and a variety of medical expenses.

While Feldman never declared bankruptcy, his mounting debt virtually destroyed his career.

Feldman, who had shown great promise as an actor in successful films including “Stand By Me” and “The Goonies,” was cast down to the pit of flop films. “I had earned a million dollars by the time I was 13 or 14, he told Bankrate in 2002. “But when I went to my bank accounts to see what my parents had put away for my future, there was $40,000 left.”

In a strange twist of fate, Feldman was married Oct. 30, 2002, to student Susie Sprague on the set of his new WB show, “Surreal Life,” with fellow debtor MC Hammer, now an ordained minister, presiding over the marriage.

Rapper Hammer's 1990 release of “U Can't Touch This” made him a star. But his money was spent on racehorses, legal battles and an entourage described by VH1 as “sizeable enough to successfully invade Switzerland.” In 1996, he declared bankruptcy.

Either Hammer doesn't learn from example, or he isn't a country music fan. He was probably too swept up in 1990 releasing “Please Hammer, Don't Hurt 'Em,” to turn on the news and see what was happening to country music star Willie Nelson.

A TALE OF TACOS, TAPES AND TEXAS

In November 1990, the IRS raided Nelson's home in Texas and seized everything -- including his 44-acre home, gold records and his children's bronzed baby shoes.

Nelson blamed his financial predicament on mismanagement of his funds by his accountant. However, his lavish spending might have been part of the problem.

This spending included a huge entourage with all expenses paid entirely by Nelson. On the payroll was Paul English, who became recognized in the “Guinness Book of World Records” as the world's highest-paid sideman drummer. Texas Monthly reported that fans would stand outside concerts and ask, not for autographs, but for money for things like wheelchairs, iron lungs and funerals. Nelson's standard reply was reportedly “Will a personal check do?”

The IRS auctioned off Nelson's home and his property, though friends and fans bought most of his things and gave them back later.

Nelson released the mail-order album “The IRS tapes: Who Will Buy My Memories?” to help pay his taxes. Fans will remember this period as the Taco Bell years -- when Nelson lent his image to endorse of the fast food chain.

In 1993, Nelson settled the $16.7 million delinquent tax bill.

Despite Nelson's well-publicized example of what not to do, an ocean away, English rock star Elton John kept spending.

YELLOW BRICK ROAD OF DEBT

Over a 20-month period between 1996 and 1997 Elton John spent $205,774 on flowers alone -- and that's just a smidgen of his spending.

In 1999, the BBC reported that John asked a merchant bank to help him borrow $40 million to pay off his debts. A year later he admitted running up debts more than $2 million a month. His spending sprees were reported to include purchases of classic cars, clothing and jewelry.

John claimed his former accounting firm, PricewaterhouseCoopers, misappropriated millions of dollars. He filed suit. But defense lawyers seemed to think John's money problems lay elsewhere.

“I'm not a nest-egg person,” said John when defense lawyers questioned his spending habits. “I'm a single man. I like spending my money.”

The London Court of Appeals shot down John's lawsuit. The suit cost him an additional $11.8 million in legal fees.

HITS, FLOPS AND CONTRACTS

A disagreement over the film “Boxing Helena” pushed actress Kim Basinger into bankruptcy in 1993. The film flopped and the lawsuit began. Main Line studio said Basinger agreed to star in the film but pulled out.

The court ruled Basinger violated a verbal agreement. She was ordered to pay $8.1 million. Five days later she filed for Chapter 11. Eventually, Basinger appealed the Main Line decision to the court and won.

While that contract caused turmoil in Basinger's life, a 1999 contract gave Lorraine Bracco a new start.

Bracco, better known as Tony Soprano's psychiatrist, Dr. Melfi, racked up over $2 million in legal fees during a six-year custody battle with actor Harvey Keitel over their daughter, Stella. Bracco declared bankruptcy in 1999.

But 1999 ended up as a good year for Bracco -- she was cast in the HBO hit series “The Sopranos.”

“I was troubled with the separation from Harvey and I had two kids at home,” she told Mervyn Rothstein of The New York Times. Bracco said “The Sopranos” was “a big turning point. It allowed me to put myself back on my feet.”

Here's hoping everyone with debt problems will have the same luck.

*

With a fortune estimated at $17 billion, Larry Ellison is so rich he spends $55,000 a day on what his accountant calls “lifestyle” expenses. It's a lifestyle few of us can even imagine, reports CBS News correspondent John Blackstone.

It's no secret Ellison, the founder of software company Oracle, spends exuberantly: $100 million went into his unsuccessful attempt to win the America's Cup sailing race.

“I'm addicted to winning. The more you win, the more you want to win,” Ellison told 60 Minutes in a 2004 interview.

He's rumored to have spent $200 million building a Japanese-style estate above Silicon Valley. Now, documents filed in a since settled lawsuit charging insider trading are giving an inside look at the billionaire's budget. A handwritten note from Ellison's accountant sets out expenditures: $194 million on a new yacht, $25 million on a villa in Japan and $20 million a year on “lifestyle.”

Worried about your credit card bill? Ellison spent $75 million in interest payments on bank loans.

Carrie Kirby of the San Francisco Chronicle first turned up the documents that reveal Ellison spends big, and borrows big. Her investigation found that in 2000 he was $1.2 billion in debt, having borrowed hundreds of millions from three different banks simultaneously.

“Wouldn't you loan money to him?” she asks Blackstone. “He's good for it, right?”

Ellison declined to comment for this story but the documents show one way he may not be much different than the rest of us. He has somebody nagging him about spending too much. An e-mail from Ellison's accountant reads: “I'm worried, Larry...New purchases should be kept to a minimum.”

It seems, however, that Ellison paid little mind to the advice given by his accountant. He later went on a beachfront buying spree in Malibu — spending $200 million on a string of luxury properties.

*

A Romanian man has handed over his wife to a creditor as payment for his debts.

Emil Iancu, from tIghisu Nou, gave his wife Daniela to 72-year-old Jozef Justien Lostrie when he turned up on his doorstep to collect a £1,800 debt.

Iancu said: “I had no money to pay the debt and when I told Lostrie, he said he would take my wife instead. I was scared of what he would do and so I signed a document saying Daniela would live with him.”

But Daniela says the deal has proved better for her.

“Before I had to clean the house and look after our three children on my own, while Emil did nothing, but now I’m treated like a guest and hardly have to raise a finger,” she said.

________

Ananova; http://www.ananova.com

Meet the Petersons. Matt is a software engineer and Suzie works mostly at home raising their three daughters: Julianne, 12, Rachel, 11, and Caroline, 9.

Many Americans continue to spend, even with thousands of dollars of debt. They live in an upscale California neighborhood in a 4,000-square-foot home with a pool, a huge walk-in wine cellar and even its own movie theater. They drive nice cars and own a second home and two vacation time-shares.

How do they do it? They’re in debt up to their eyeballs.

“I know that we don’t make ends meet each month, and to make ends meet, we use credit cards, and then the credit card payments start increasing, and you just can’t make ends meet even doing that,” Suzie said.

Their monthly household income of $8,750 isn’t enough to cover all of their expenses, which total $15,000 a month. For over a year, the Petersons have relied on credit cards to keep afloat financially.

Using one card to pay off the other, their credit card balances eventually ballooned to $60,000. Their Bank of America Visa alone has a balance of $19,000, at an interest rate of nearly 33 percent.

The burden of their debt is something that keeps Suzie up at night. “I woke up at 2:30 a.m. this morning because yesterday we went to the diner and tried to use the debit card and it didn’t work.”

AN EPIDEMIC OF DEBT

The Peterson’s financial situation may sound shocking, but they are not alone. Nationally, credit card debt is growing -- almost tripling since 1989. Today, American consumer debt is over a trillion dollars. More than half of all cardholders don’t pay their cards off each month and carry an average balance of around $2,000.

Ironically, families like the Petersons -- who struggle to make the minimum monthly payments -- are more valuable to credit card companies than customers who pay in full every month. According to the Government Accounting Office, credit card issuers make 70 percent of their profit from the interest payments made by cardholders who carry a balance every month.

Still, credit card companies insist they are not banking on customers’ inability to pay.

“Credit card issuers are concerned about people who are only able to make the minimum payment because those people are at significant risk of not repaying the loan in the short term and that means the bank loses the money,” said Nessa Feddis, a lawyer with the American Bankers Association, an industry trade group.

For that reason, Feddis says, credit card companies are constantly adjusting their policies to minimize the number of customers paying only the minimum amount.

READ THE FINE PRINT

Elizabeth Warren, who teaches bankruptcy and commercial law at Harvard University, disagrees. “Credit card companies have a special word for the customers who pay in full every month. They’re called deadbeats.”

Nothing helps the credit card companies’ bottom line more than the fees and high interest rates they earn from consumers who are struggling with their payments. For example, one of the Petersons’ credit cards charges a $39 fee for going over the spending limit or being late on a payment.

And even if the Petersons always pay their bill on time, the bank can still increase their interest rate to 32 percent if the Petersons are late with a car or mortgage payment, or any other payment to a creditor. That’s because a “universal default” clause is buried in the fine print of the Peterson’s credit card agreement, the terms of which can be changed by the credit card company “at any time for any reason.”

“There’s no contract like that anywhere else in America,” said Warren, a contract law expert who admits that even she has trouble understanding some of the terms of credit card agreements. “They’re deciding all the rules.”

“We agree that the disclosures could be better,” said Feddis. But she also argued that some responsibility has to fall on the consumer. “Pay off at the end of the month and pay no interest. Every cardholder has that opportunity. They make that choice.”

THEY NEVER STOPPED SPENDING

In the Peterson case, a series of bad choices contributed to their massive debt. Six years ago, Matt lost his job and spent more than a year out of work. During that time, Suzie decided to open two scrapbooking stores. When her business folded last year, they ended up losing about $200,000 -- most of it borrowed money. There were also some bad real estate and stock investments.

Even as their financial situation worsened, however, the Petersons continued to spend. Last year alone, they took three vacations -- a cruise through the Carribean, a trip to Whistler, Canada and another to Hawaii.

The cruise was a contest prize, while other expenses were covered by their time shares. But all together, those vacations still cost the Petersons $4,000.

Matt concedes the vacations may have been unwise, given their dire finances. “OK, we need to be punished, I guess,” he said.

Suzie, however, has no regrets. She saw the vacations as a way to bond with her daughters. “The cruise was my gift to my family.”

‘THE SHIP IS STARTING TO GO DOWN’

To help them dig out from under all of their debts, “20/20” introduced the Petersons to financial planner Robert Pagliarini, author of “The Six-Day Financial Makeover,” a step-by-step guide to transforming your financial life.

After reviewing the Petersons’ financial records, Pagliarini calculated that they were about five months away from bankruptcy. All of their debts translated to a loss of $200 each day.

Pagliarini, the president of Pacifica Wealth Advisors in Los Angeles, likened the Peterson’s situation to the Titanic.

“You’ve already hit the iceberg,” he explained. “The ship is starting to go down. That’s the bad news. The good news is you still have a small window of opportunity to make some changes.”

TAKING ACTION

Pagliarini devised a six-month action plan to rescue the Petersons from economic ruin. First, he advised them to dump their expensive time shares, even though this will mean the Petersons will lose $46,000 on their investment.

Pagliarini hopes they can recoup some of those losses by also selling their home and their second rental property. He believes those transactions will net the Petersons about $113,000.

Pagliarini then wants the Petersons to use that money to pay off their $60,000 credit card debts. If they take all of these steps, Pagliarini believes, the Petersons will actually have a few thousand dollars leftover to save and invest.

The catch? It’s an all or nothing proposition. “Do all the big things or do none of them, because if you just do one, two or three, it’s not going to work,” said Pagliarini.

Matt Peterson is excited by Pagliarini’s plan. “We can’t wait. I mean we literally can’t wait,” he said.

Suzie was less enthused, saying, “We have no place to live and $3,000.”

DIGGING OUT OF DEBT

But by getting rid of all of their real estate, the Petersons will also unload expensive tax bills, mortgage payments and maintenance fees -- drastically cutting their monthly expenses.

When all the dust settles, Pagliarini believes the Petersons will be able to afford to rent a house in their neighborhood on Matt’s current salary, and still have about $1,200 extra cash every month to save and invest. Compare that with the $6,250 the Petersons are now losing every month.

Pagliarini told them, “At the end of the day, after the cameras are off, it’s you two. And you really have to decide, ‘Are we willing to make these kinds of changes?’”

In the last week, the Petersons have begun contemplating some of those changes. They spoke to a real estate broker about listing their house and rental property. Pagliarini says he is always a phone call away to offer support, but whether this family can dig out from all that debt is now up to two people -- Matt and Suzie Peterson.

Ed McMahon is a rich guy. Or at least he WAS a rich guy. For decades he was the sidekick for Johnny Carson. Then he was the celebrity spokesman for the American Family Publishers sweepstake and gave away $130 million. He now wishes he had kept some of that.

He is behind $650,000 on the mortgage on his Beverly Hills mansion and the bank is starting foreclosure proceedings. Ed also owes American Express $750,000.

How did a multi-millionaire end up like this? He says, “I honestly didn’t see it coming.” On reflection, he notes that he pays big alimony for two divorces. He also hasn’t been able to work since breaking his neck a year-and-a-half ago. And he didn’t bother to track his finances.

I doubt that Ed McMahon will end up in some gutter. He has richer friends than you do.[*] But financial disaster can hit even decent, hard-working people. All it takes is a few bumps and your house of cards begins to tumble down.

________

* A few weeks later, Donald Trump bailed McMahon out.

Matthew 5:25-26

“Settle matters quickly with your adversary who is taking you to

court. Do it while you are still with him on the way, or he may

hand you over to the judge, and the judge may hand you over to

the officer, and you may be thrown into prison. I tell you the

truth, you will not get out until you have paid the last penny.”

John Pintard, a man of steady habits, made profitable use of his year in debtors’ prison. Locked up beginning in 1797 in a two-story stone jail in Newark, New Jersey, that loomed, like a tombstone, over the town’s burial ground, he walked more than a thousand miles -- 113,984 lengths of the hall -- and read more than a hundred books, from “The National Debt Productive of National Prosperity” to the complete works of Samuel Johnson, including Johnson’s Dictionary, which he digested at a rate of one page every nine minutes, which meant that, between the time he spent pacing like a caged animal and the hours he whiled away drafting letters to his creditors, begging them to forgive his debts, it took him a hundred and fifty-seven days to get from “abacus” to “zootomy.” Reading the Dictionary was a way to mark time, like making hash marks on the wall of a cell with a lump of coal. But it went beyond that. “I am more indebted to him than any other writer,” Pintard wrote of Johnson, aptly. Johnson himself had spent time in debtors’ prison -- twice, once for a debt of five pounds -- and had pointed out the senselessness of it. “We have now imprisoned one generation of debtors after another,” Johnson observed in 1758, “but we do not find that their numbers lessen.”

What’s to be done with people who can’t pay what they owe? Throwing them into prison seems preposterous now; it seemed preposterous then, too. What’s the point, if a man has already handed over to his creditors everything he owns? asked the author of “The Ill Policy and Inhumanity of Imprisoning Insolvent Debtors,” printed in Rhode Island in 1754. “Can his Creditors, with all their Wisdom, have more than All? Will his Imprisonment increase his Estate? Will his Confinement pay or diminish his Debts? or the Punishment of his Body be any Kind of Advantage to them, or to Society?”

It isn’t hard to make the argument against debtors’ prison. But it took more than an argument to abolish the institution, mainly because it was so horrible that it worked, at least as a threat: few things motivate prompt repayment of money owed better than the prospect of a dark, dank dungeon where rats and smallpox thrive while men and women shrink and shrivel and starve and die. (Jailers provided food, bedding, and fuel for felons; debtors were left to fend for themselves.) The British Parliament didn’t ban the imprisonment of debtors until 1869. The practice ended much sooner in the United States. Imprisonment for debt was abolished in New York in 1831; the rest of the country soon followed.

What replaced it, as Harvard Law School’s Bruce Mann reported in “Republic of Debtors,” a landmark study of eighteenth-century financial failure, was something that has become a mainstay of American life: bankruptcy. Under the terms of the first U.S. bankruptcy law, passed in 1800, Pintard’s debts were discharged, his ledger erased, and his past, eventually, forgotten. Other countries have bankruptcy laws, too, of course, but they generally favor creditors; our laws favor debtors, and always have.

We have been bailing ourselves out, in other words, from the beginning. Lately, we’ve been bailing fast and furious, but not as fast as the water’s been rising. Eighty-six hundred Americans filed for bankruptcy in 1946; 191,729 in 1967; and 314,886 in 1980. An even steeper increase in the number of bankrupts since then is usually attributed to relaxed provisions of the 1978 Bankruptcy Code; non-business bankruptcy filings first topped a million in 1996. The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act made it harder to declare bankruptcy by introducing means testing. In the spike just before that law’s implementation, the number of bankruptcy filings passed two million; the following year, in its aftermath, the number dropped to six hundred thousand, but it’s been creeping back up ever since. There were more than a million filings in 2008. Put another way: in 1946, one in seventeen thousand Americans declared bankruptcy; last year, one in three hundred did. November 2008 saw 5,075 bankruptcy filings daily, a thirty-seven per-cent increase over the same month the year before. In 2009, about one and a half million filings are expected, although if Congress makes it easier for homeowners who file for bankruptcy to avoid foreclosure, that number could climb even higher.

We have discharged one generation of debtors after another, but we do not find that their numbers lessen. We find only that we forget, when times are good, that times were ever bad. The colonies were settled, the nation founded, the country built, by debtors. We’ve forgotten that, too; debtors don’t like to look back. “The present generation is bankrupt of principles and hope, as of property,” Ralph Waldo Emerson once wrote. Mostly, though, we’re bankrupt of history.

The state has arbitrated insolvency since antiquity. Under Roman law, the body of a debtor could be cut up and disbursed to his creditors. That probably never happened, but it was common for debtors to end up as slaves. (Debt and slavery, historically -- and conceptually -- are always tangled up together.) In England, statutes decreeing imprisonment for debt date to the thirteenth century. The point wasn’t to lock you up -- as the proverb had it, “A prison pays no debts” -- but to terrify you into paying, to avoid incarceration. Nine times out of ten, that’s just what happened, which is why the practice prevailed in most parts of the early modern world and, in the seventeenth century, travelled, with English common law, to America. A 1641 Massachusetts law known as the “Body of Liberties” closely followed English practice, declaring of the insolvent that “his person may be arrested and imprisoned where he shall be kept at his owne charge, not the platife’s till satisfaction be made.” The logic behind this bring-your-own-mutton-and-peat clause was that you might be hiding your money and, if you weren’t, and were truly broke, your friends and family would pony up to keep you in food and firewood or, better still, to pay your debts. There were no terms: you weren’t sentenced for a month, a year, a decade; you stayed in jail until your creditors were satisfied.

This didn’t work that well in the New World. As many as two out of every three Europeans who came to the colonies were debtors on arrival: they paid for their passage by becoming indentured servants. Early on, labor was so scarce that colonists who fell into debt once they got here paid with work; there was much to be done, and there weren’t many prisons. In 1674, a Massachusetts court ordered Joseph Armitage, who owed John Ruck twenty-two pounds, to serve as Ruck’s servant for seven years. (What relieved the colonies’ labor scarcity and spelled the end of debtor servitude was the rise of the African slave trade.) The colonies were also a good place to go to run away from your debts. Some colonies were, basically, debtors’ asylums. In 1642, Virginia, eager to lure settlers, promised five years’ protection from any debts contracted in the Old World.

This didn’t work that well in the New World. As many as two out of every three Europeans who came to the colonies were debtors on arrival: they paid for their passage by becoming indentured servants. Early on, labor was so scarce that colonists who fell into debt once they got here paid with work; there was much to be done, and there weren’t many prisons. In 1674, a Massachusetts court ordered Joseph Armitage, who owed John Ruck twenty-two pounds, to serve as Ruck’s servant for seven years. (What relieved the colonies’ labor scarcity and spelled the end of debtor servitude was the rise of the African slave trade.) The colonies were also a good place to go to run away from your debts. Some colonies were, basically, debtors’ asylums. In 1642, Virginia, eager to lure settlers, promised five years’ protection from any debts contracted in the Old World.

Nevertheless, before long jails were built, and American creditors proved keen to seize their debtors. Debt might be a crime and, worse, a sin, Cotton Mather preached in a 1716 sermon title “Fair Dealing Between Debtor and Creditor,” but if the colonists, cash poor and on the edge of the world, couldn’t live with it they certainly couldn’t live without it. “Yea, without some DEBT, there could be no TRADE carried on.” Some debt, yeah. The question was, and remains: how much is too much? Of 1,162 debtors committed to debtors’ prison in New York City in 1787 and 1788, 716 owed less than twenty shillings.

Debtors in New York used to be locked up in the attic of City Hall. They would lower shoes, tied to a string, to collect alms from passersby. The city’s poorest debtors sat in darkness, day and night. They had no rooms; they slept on the floor in the ground-floor hall or were shut up in the cellar.

The idea that debt is necessary for trade, and has to be forgiven, is consequent to the rise of a market economy. The idea that debt is wrong and should be punished is a feature of a moral economy. Historians generally argue that the market economy replaced the moral economy sometime between 1700 and 1900. Of course, it’s a lot messier than that, or pundits would not be calling for corporate executives of failed companies to be air-dropped onto Alcatraz. Every major American bankruptcy law has been the product of a financial crisis or a depression -- and was subsequently repealed or watered down when the economy revived. One reason is that we are a voting democracy and debtors always outnumber creditors by a big margin.

Americans like to get rich fast. That this means we go broke fast, too, is something that we become very good at forgetting. We are unfailingly optimistic. After John Pintard was released from debtors’ prison, he made a point not to forget to be pessimistic: “Should prosperity smile, let me never forget the suffering I have endured to serve as a check against presumptuous hopes.” He took away from prison a sense of civic obligation. “We all owe a debt to Society as well as to God,” he wrote in 1816, “and I wish to discharge my share.” One of his projects was the establishment of the first savings bank in the nation. He said his countrymen would have to learn “to plod and earn an honest living, to accumulate by slow degrees.” Americans, Pintard believed, “are like the Indians, who think when Spring comes that there will be no more winter."

The President of the United States has enormous influence over the finances of the nation. How have they done with their personal finances? The net worth of the presidents varies widely. George Washington was worth over half a billion in today’s dollars. Several presidents went bankrupt.

2nd President Thomas Jefferson lived beyond his means and was mired in debt at the end of his life.

4th President James Madison was the largest landowner in Orange County, Virginia, and made significant money as secretary of state and president, but he lost money at the end of his life due to the steady financial collapse of his plantation.

5th President James Monroe married into money and made significant income during eight years as president, but entered retirement severely in debt and was forced to sell his large plantation.

7th President Andrew Jackson proclaimed himself the champion of the average man but was actually worth around $119 million in today’s dollars at his peak, yet at the end of his life he held significant debt.

9th President William Harrison married into money and he himself inherited 3,000 acres. He owned a mansion and property in Indiana but died penniless, causing Congress to create a special pension for his widow.

10th President John Tyler inherited a 1,000-acre plantation and his first wife was rich. He became indebted during the Civil War and died poor.

The fortunes of American presidents are tied to the economy in the eras in which they lived. For the first 75 years after Washington’s election, presidents generally made money on land, crops, and commodity speculation. A president who owned hundreds or thousands of acres could lose most or all of his property after a few years of poor crop yields. Wealthy Americans occasionally lost all of their money through land speculation — leveraging the value of one piece of land to buy additional property. Since there was no reliable national banking system and almost no liquidity in the value of private companies, land was the asset likely to provide the greatest yield, if the property yielded enough to support the costs of operating the farm or plantation.

Because there was no central banking system and no commodities regulatory framework, markets were subject to panics.

The panic of 1819 was caused by the deep indebtedness of the federal government and a rapid drop in the price of cotton. The immature banking system was forced to foreclose on many farms. The value of the properties foreclosed upon was often low because land without a landowner meant land without a crop yield.

The panic of 1837 caused a depression that lasted six years. It was triggered by a weak wheat crop, a drop in cotton prices, and a leverage bubble in the value of land created by speculation. These factors caused the US economy to go through a multi-year period of deflation.

The sharp fluctuations in the fortunes of the first 14 presidents were a result of the economic times.

Beginning with Millard Fillmore in 1850, the financial history of the presidency entered a new era. Most presidents were lawyers who spent years in public service. They rarely amassed large fortunes and their incomes were often almost entirely from their salaries. From Fillmore to Garfield, these American presidents were distinctly middle class. These men often retired without the money to support themselves in a fashion anywhere close to the one that they had as president. Buchanan, Lincoln, Johnson, Grant, Hayes, and Garfield had almost no net worth at all.

The rise of inherited wealth in the early 20th Century contributed to the fortunes of many presidents, including Theodore Roosevelt, Franklin D. Roosevelt, John F. Kennedy, and both of the Bushes. The other significant change to the economy was the advent of large professionally organized corporations. These corporations produced much of the oil, mining, financial, and railroad fortunes amassed at the end of the 19th Century and the beginning of the 20th. The Kennedys were wealthy because of the financial empire built by Joseph Kennedy. Herbert Hoover made millions of dollars as the owner of mining companies.

The stigma of making money from being a retired president also began to disappear. Calvin Coolidge made a large income from his newspaper column. Gerald Ford, who had almost no money when he was a Congressman made a small fortune from serving on the boards of large companies. Clinton made millions of dollars from writing his autobiography.

You know you’re in financial bondage if ...

a. You argue with other family members about money.

b. You don’t pay off your credit card each month.

c. You get past due notices.

d. You spend money as emotional therapy. Or ...

e. All of the above.

The correct answer is any or all of the above. If one or more of these apply to you, you need to bring your finances in line with biblical principles.

Maybe you think financial bondage is everywhere, but I have the privilege of meeting thousands of people following God’s principles who are living a joyous, victorious life of financial freedom. You can, too.

Financial bondage is usually the result of incorrect beliefs about money. Romans 12:2 offers the solution: “Do not be conformed to this world, but be transformed by the renewing of your mind.”

You may profess to be a follower of Christ, and yet your financial habits have been subtly conformed to what everybody else is doing. This issue is commonly known as the “keeping up with the Joneses” syndrome. That’s why it’s important to be transformed by the renewing of your mind -- as Scripture says -- because what you believe changes how you behave. Applying spiritual truth leads to very practical results. I know, because it happened to me.

If you change what you believe about money -- turning away from what the culture wants you to believe and toward what God wants to teach you -- you’ll be transformed, radically changed from the inside out.

Then, when you apply that truth to your financial decisions, your behavior will change. Even better, it will stay changed as you stay in God’s Word and are fed by it. Anything else is just a fad diet that won’t protect you from slipping back into financial bondage.

As you commit to following God’s way out of financial bondage, here are some practical steps that you can begin implementing right away:

1. Stop any form of borrowing. This includes credit cards and loans from family and friends. Consumer credit is our most common source of indebtedness, and the sooner you stop borrowing, the sooner you will get out of debt.

2. Develop a spending plan. A spending plan gives you the freedom to spend money with a purpose or strategy. It simplifies daily decisions and ensures that your priorities will be met. The deeper in debt you are, the more restrictive your spending plan will need to be while you pay down debt.

3. Work out a payback plan with your creditors. Most creditors are willing to work with people who honestly want to repay them.

4. Learn to trust God and you will experience self-control. That sounds like a paradox, but it’s the key to getting out of debt and staying out of debt. The more you trust God, the less you’ll want to borrow.

5. Break the hold materialism has on your heart through giving. The cure for wanting things is generosity. Begin giving 10 percent of your income to support God’s work to demonstrate He is the highest priority in your life.

6. Seek counsel and advice. Pray and ask God to place others in your life that will gladly share their wisdom and experience to help you achieve your goals.