Law, Religion, and Debt Relief

Debt forgiveness is at the heart of the Gospel message. The Lord sent his Son to redeem the debts of the world as created by Adam and Eve and transmitted to the subsequent generations of man. The New Testament restored older Biblical ideas of debt relief such as the Jubilee. In the Lord's prayer God is begged to forgive us our debts, as we also forgive our debtors (Mt 6:12). Yet, what, if anything, does that mean for legal practice? Is there a Christian way of collecting debt and enforcing contractual promises? Should Christian creditors refrain from exercising their rights? This paper wants to explore the responses given to these questions by canon lawyers and moral theologians in sixteenth and seventeenth century Europe, many of whom belonged to the so-called "School of Salamanca". They took natural law as the ultimate yardstick to evaluate the lawfulness of man's actions in the world. We will conclude that these moral and legal experts were sensitive to the needs of indigent debtors, but certainly not to the point of promoting cancellation of debt. They insisted upon the bindingness of contractual promises (pacta sunt servanda), considering extension of payment to be the most appropriate manner to deal with insolvent debtors. Debt relief in the strict sense of the word raised only suspicions, since the marketplace is subject to the dictates of justice, not charity.

Covenant · Creditor · Debt · Economics · Forgiveness · Gospel · Humanity · Insolvency · Political science · Prayer · Sociology · Theology · Finance · Historical Economic and Legal Thought · Law · Philosophy