Attaining Debt Freedom

Some instructions should be given here for those who are seeking to obtain debt freedom. There are many good financial instructors on the internet such as the financial counselors like "Dave Ramsey" who give instructions about how to obtain debt freedom by paying off debts in a systematic manner.

Paying Off Credit Card Debts

One method of paying off many different credit card debts is called "Powering their Way Out of Debt" and this entails paying off the smallest credit card balance first then moving toward paying off the largest debts last. Under this situation a debt-slave is currently making multiple credit card payments every month so that almost their entire monthly income is consumed by snowballing interest charges on all of these various credit card debts. By paying off the smallest debt first they can then free the monthly payments that go toward that smaller debt to be placed toward the next debt in the line-up. If they had ten-credit cards debts and they paid off nine of the ten debts in progressive manner then they could put the monthly savings previously paid toward the smaller debts toward their last and largest debt. In this manner, they can pay off the remaining debt quickly because they have freed the payments which they previously had been making toward smaller debts and directed all of these payments toward the final and largest debt. Many people enslaved to credit card debt were able to pay off all of their credit cards in this manner. This simple principle of paying off the smallest debts first enabled them to use the money saved in payments from the smaller debts to go toward the next debt in the series until they are completely paid off.

Bankruptcy Debt Cancellation

In the case of impossible debt situations there is available the principle of debt-cancellation in the form of bankruptcy which is a legal avenue of debt relief allowed by nations who follow a Judaeo/Christian culture such as the U.S.A.

I met a man from Iowa USA whose wife perished from a lingering death by terminal disease. The hospital bills were astronomical and he owed many hundreds of thousands of dollars in medical bills incurred by his now deceased wife. He wanted to remarry but could not afford to do so with this debt hanging over his head. He was working at minimum wage job at the cafeteria of the hospital where his wife died and which same hospital now became his creditor. There was no way he could ever pay off such a debt during his lifetime (especially not with the meager wages he was making) and because of the way these debts were growing with predatory interest added to them.

It is for just such a person that bankruptcy laws were created so that he could cancel these looming debts and start over again. There is no shame in filing for bankruptcy when in fact this principle comes from the God of Israel and is recorded in the Jewish Torah.

Year of Debt Cancellation

Deuteronomy 15:1-2 (NLT2)

¹ “At the end of every seventh year you must cancel the debts of everyone who owes you money.

² This is how it must be done. Everyone must cancel the loans they have made to their fellow Israelites. They must not demand payment from their neighbors or relatives, for the LORD’s time of release has arrived.

The God of Israel provided for his people to obtain debt freedom once every seven years. The United States has based their civil laws upon the Jewish Torah and they also allow bankruptcy to be filed once every seven years. This gives people a chance to start over again being debt free so they can have a second chance in life.

Exodus 21:2 (NIV)

² "If you buy a Hebrew servant, he is to serve you for six years. But in the seventh year, he shall go free, without paying anything.

A Hebrew slave represents someone who sold themselves into slavery because they were heavily in debt. But on the seventh year they were to be set free from slavery and be released without having to pay anything.

Deuteronomy 15:9-10 (NIV)

⁹ Be 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.

¹⁰ Give 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.

When the debts were cancelled on the seventh year they were to send away the former slave with blessings so that he could have a chance to start over again. This speaks of the principle of having an emergency fund to stay out of debt and a savings. Sending the former slave away with blessing allowed him to remain debt free so he would not have to return to slavery again. All those who owe money are in fact debt-slaves to the principle still applies to anyone who has any type of debts today. If they are being bled by predatory interest so that they barely have food to eat while all of their money goes to pay debts then that is still slavery even without a iron ball and chain attached to their ankle.

Deuteronomy 15:12-15 (NIV)

¹² If a fellow Hebrew, a man or a woman, sells himself to you and serves you six years, in the seventh year you must let him go free.

¹³ And when you release him, do not send him away empty-handed.

¹⁴ Supply him liberally from your flock, your threshing floor and your winepress. Give to him as the LORD your God has blessed you.

¹⁵ Remember that you were slaves in Egypt and the LORD your God redeemed you. That is why I give you this command today.

The idea here was that this was a new start for them and they should be sent away with blessing after their seven years of slavery was ended. In this manner they would not be forced back into slavery again but could live as freemen who are free of debt.

Even if a debt-slave pays an attorney fee of $3,000.00 US dollars for filing for bankruptcy this is still a small price to pay if they own a debt that is many times more than this small fee (by comparison). For example, if they owned $250,000.00 USD in credit card debt but paid only $3,000.00 USD to cancel it all then that would seem like a small price to pay for debt freedom.

But once they are debt free, they must immediately begin to build up an emergency fund. They must banish the thought that they can use a credit card in an emergency because if they do that then they will soon be ensnared again into debt. They must have an emergency fund in order to cover emergencies like vehicle repairs or replacing an appliance like a washer or refrigerator so that they will not fall back into debt again. Then they should also have an additional savings that is beyond what they have for emergency needs. If they do not secure these type of savings immediately after their debts are cancelled by bankruptcy then they are in grave danger of being ensnared back into debt again.