The cancellation of debt in the Old Testament was accomplished at legislated intervals. Deuteronomy 15:1-2 clearly provides for such legislative release with the following language: "At the end of every seven years you shall grant a release. And this is the manner of the release: every creditor shall release what he has lent to his neighbor, his brother, because the Lord's release has been proclaimed." Under this Biblical model, the debtors' payment or non-payment of debts was not in question. The debtors may not have been culpable for their debts. It was a strict model with no "means test" or detailed analysis of every debt. And, while Old
Testament lenders were admonished to be merciful, debts were canceled every seven years whether theyliked it or not. The Old Testament model can therefore be legitimately applied to modern day bankruptcy laws. The principle is that, while taken seriously, debt can be canceled to achieve some higher purpose - such as the preservation of the family unit. It also should be noted that Deuteronomy 15:12-13 provides that slaves should be freed every seven years creating an interesting analogy between the creditor-debtor and the master-servant relationship.
The Biblical use of the term "usury" corresponds to our modern word interest rather than to the notion of "excessive interest" to which we generally apply the term usury today. Only a small number of us would seriously question the morality of profiting from a loan at normal interest rates. However, the Talmud quotes an ancient rabbi as saying: "It is better to sell your daughter into slavery than to borrow money on interest."
The Lord only knows what this same rabbi would say today if confronted with credit cards bearing interest rates of 34.99% and higher and with some "pay day" lenders demanding annual rates in excess of 2,000%.
The Biblical doctrine of usury rests primarily on three texts: Exodus 22:25; Leviticus 25:35; and
Deuteronomy 23:19-20. Exodus and Leviticus prohibit loans of money or food with interest to a needy brother or sister or even a resident alien. Deuteronomy forbids taking interest from any person.
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