As long as there have been humans, there has been debt. Loaning money to buy things, plant crops, and even for food and clothing, has been around forever. The problem of a population who can’t get out of debt is documented in the Bible. Debt forgiveness is necessary. Lenders know that: at a certain point too much debt needs to be eliminated or there is trouble.
In 1 Samuel 22, David gathered everyone that was in distress, everyone that was in debt, and everyone who was discontented. The only answer to debt was to start a revolution. 10 Nehemiah 31 required the seventh year to be free of the exaction of debt.
The Old Testament frowned on debt. Proverbs 22-1: The rich rule over the poor and the borrower is the servant to the lender, and 22-16: He that oppresseth the poor to increase his riches, and he that giveth to the rich, shall surely come to want.
The origin of the modern bankruptcy exemption that protects basic items from creditors is found in Proverbs 22-27: If thou has nothing to pay, why should he take away your bed from under you?
Best of all is 6 Matthew 11- 12. Give us this day our daily bread, and forgive us our debts as we forgive our debtors.
In Matthew 18 21-34 Jesus explains what forgiveness is, telling the story of the king who forgave the debts of a servant who owed 1000 talents. Instead of selling the servant, his wife and children and all he had, the king forgave the debt. But the servant went out and tried to collect a debt owed too him for only 100 pence. When the king found out that the servant, whose debt the king had forgiven, was trying to collect a very small debt from a poor man who had nothing, the king changed his mind:
32. and said unto him, O thou wicked servant, I forgave thee all that debt, because thou desiredst me:
33. Shouldest not thou also have had compassion on thy fellow servant, even as I had pity on thee?
34. And his lord was wroth, and delivered him to the tormentors, till he should pay all that was due unto him.
In 7 Luke 41 a creditor forgave two debts, one large and one small. Who loved the creditor the most? The one with the largest debt that was forgiven.
Deuteronomy 15 1-3 is the origin of bankruptcy discharge after 7 years:
1. At the end of every seven years thou shalt make a release.
2. And this is the manner of the release: Every creditor that lendeth ought unto his neighbour shall release it; he shall not exact it of his neighbour, or of his brother; because it is called the Lord's release.
3. Of a foreigner thou mayest exact it again: but that which is thine with thy brother thine hand shall release;
Be glad that the Founding Fathers read the Bible! A lot of the early settlers were running from their creditors in England, where they had debtor’s prisons, and no bankruptcy laws to protect you and your basic property. Until a few years ago, the United States of America was the only country in the world with a consumer bankruptcy law. Italy and Germany did not have debt forgiveness for individuals until after 2015.
Did you know that Abraham Lincoln was a bankruptcy lawyer in Springfield, Illinois in 1841? Honest Abe believed in bankruptcy debt forgiveness. When he was starting out, there were no U.S. Bankruptcy laws, and it took him almost 15 years to pay off debts from when his country store went under. Read "With Malice Toward None" by Stephen B Oates for more on Lincoln.