Bankruptcy and Tithing

Posted on January 03 2007

With the recent bankruptcy reform of 2005 the courts have been in question whether to allow individuals filing Chapter 13 bankruptcy to continue their charitable giving or pay religious tithing until debts are paid off. This has raised many eyebrows as Congress has a long history of protecting the citizen’s religious freedom to tithe.

Earlier in 2006 a bankruptcy court ruled in New York that a couple was not permitted to give $100.00/week to their local church until their debts were paid. This was due to the court’s interpretation of the bankruptcy reform that took place in 2005.

Congress has recently passed legislation which would allow individuals and families to contribute to charitable giving or participate in religious tithing while participating in a consumer bankruptcy. Sen. Orrin Hatch, R-Utah and Sen. Barack Obama D-IL were co-sponsors of this bill.

I believe this is a step in the right direction protecting freedom of religion in the United States. I like how Sen. Barack Obama stated the importance of allowing people to continue their charitable giving. He said “For millions of Americans, charitable giving and tithing is an essential part of their lives and in a country where 37 million citizens live in poverty, we should be encouraging charitable giving, not limiting it.”

This legislation is expected to be signed by President Bush.

-Joe Larson FLCS Credit Counselor