FINANCIAL - DEBT SETTLEMENT

Scripture Reading - Luke 16:4-8 KJV

4 I am resolved what to do, that, when I am put out of the stewardship, they may receive me into their houses. 5 So he called every one of his lord's debtors unto him, and said unto the first, How much owest thou unto my lord? 6 And he said, An hundred measures of oil. And he said unto him, Take thy bill, and sit down quickly, and write fifty. 7 Then said he to another, And how much owest thou? And he said, An hundred measures of wheat. And he said unto him, Take thy bill, and write fourscore. 8 And the lord commended the unjust steward, because he had done wisely: for the children of this world are in their generation wiser than the children of light.

In today’s economy we have seen a lot of money shifting. This shifting took place all the way from the expensive housing mortgages of hundreds of thousands of dollar to the credit card balances of only a few hundred dollars. It seemed like when an asset was tied to the loan amount the asset was taken when payment could not be made. However, when there was no asset tied to the debt then all credit card privileges were withdrawn by the credit card center (bank, store, credit union, financial institution, etc…. ) and payment was demanded. The problem many Americans had (and many still have today) is over extending their debt to higher levels that interfere with their income. Someone once asked us (ihlcc), "What should I do if I do not have enough money to keep-up with the regular payments on my credit cards?" This will eventually happen to all those who mishandle their credit limit because the intention of the credit card financier is to let your temporal payments of interest be his permanent source of income. The problem becomes more obvious when you realize that you will be paying for the credit card loan much longer than you anticipated. In some case, the credit card debt through the accumulation of interest will be paid out longer than certain home mortgages. Here in America we have become so accustom to credit card debt that we choose to live with it as a necessity of life. However, we do notice according the scriptures shared today that “debt settlement” was practiced in the Holy Bible. Of course it is always better to only buy what you can afford with the money on hand, so that you will never have an outstanding debt. Notice that in this context the steward really didn’t know how much money each debtor owed, so he could never fully collect the proper amount. This made the first step easy, which is to find out exactly what each debtor owed. Once he had this knowledge he had enough leverage to negotiate separately with each debtor. The key with debt negotiation is to have money on hand. Since everyone typically likes a good sale, it is rational to believe that if you can pay less to get more you would be interested in that proposition. Speaking with debtors was basically asking them, “How much money did they have with them on hand?” To the first debtor, fifty percent was used as a “settlement cost” for the whole loan because that is what the person had in their possession. The next debtor had eighty percent of their total bill so eighty percent was used to reconcile the account. The thought here is that some money today at a discounted lump sum is still better than no money at all with the hope of a future payment coming in. The steward was wise because he chose to help others and thus at the same time he helped himself out of a real problem. So when you don’t have enough money to pay all your debt in one payment it is still biblical to pay a good portion of the debt at a reduced payoff if you can receive the full credit of paying the loan/debt off. So be wise dear child of God and owe no credit card debt. However, if you do have credit card debt please realize your options of many small payments stretched out over many years is not as good as a couple of very large payments at a reduced payoff to expedite the process of debt removal from your life. Amen!