I’m thinking about borrowing money in order to get out of a dire situation, but, to be perfectly honest, I’m not 100% certain of my ability to repay the loan. Can you provide some moral guidance?

You’re not alone in asking a variation of this question, even though the answer really ought to be obvious. As people consider their personal circumstances, they find it easy to rationalize a wrong. Somehow, their situation is different than anyone else’s.

Let’s consider an example. As a result of the recession, an owner of several investment properties saw her houses vacated by her renters. The renters damaged the houses in the process of leaving. The owner didn’t have the funds needed to make the necessary repairs. Her friends advised her to use credit cards. In my book, this already raises a red flag.

But, even more important, the friends then suggested that she default on the credit-card debt and negotiate a settlement for cents on the dollar.

There are two points that need to be made. First, while Scripture doesn’t describe the use of debt as sinful, it does describe its use in a cautionary manner (see Proverbs 22:7 and Habakkuk 2:6-7 as examples). If the owner has to resort to using credit cards as the source of funding for making necessary repairs, she is in over her head and needs to look for alternative solutions.

Second, it’s important to remember that when we borrow we enter into an agreement with another party — the lender. While it’s one thing to enter into an agreement in good faith, then have circumstances change, it’s quite another to enter into an agreement with the intent to not fulfill your end of the deal. Given the economic crisis, I am becoming more and more concerned with the ease with which people are willing to break promises they have made. The Catechism addresses this in a very cogent manner; the section is worth sharing here:

Promises must be kept and contracts strictly observed to the extent that the commitments made in them are morally just. A significant part of economic and social life depends on the honoring of contracts between physical or moral persons — commercial contracts of purchase or sale, rental or labor contracts. All contracts must be agreed to and executed in good faith” (No. 2410).

The Catechism continues: “Contracts are subject to commutative justice, which regulates exchanges between persons and between institutions in accordance with strict respect for their rights. Commutative justice obliges strictly; it requires safeguarding property rights, paying debts, and fulfilling obligations freely contracted” (No. 2411).

Obviously, there is always a need for the ability to make adjustments to contracts as new circumstances dictate, but such adjustments should very much be the exception rather than the rule.

To the extent that people become accustomed to breaking promises and contracts, we can expect a breakdown in trust and the smooth functioning of society. And by living so close to the economic edge, whether it be government, businesses or individuals, we are creating an environment where the breaking of promises becomes too easily accepted.

God love you!

Phil Lenahan is online at