The doctrine of the early church was clear: “Owe no man anything.”
Romans 13:8. You’ve heard it in sermons. You’ve heard it from people who think your credit card debt is a character flaw. You’ve heard it whispered at the kitchen table when someone in the family admitted they couldn’t keep up.
So here’s a question nobody in the pew is asking.
If owing money is a sin — why did the Roman Catholic Diocese of Vermont file Chapter 11 bankruptcy?
Not quietly. Not reluctantly. Strategically.
Here’s what they did:
Back in 2006 — years before filing — the diocese restructured approximately $500 million in parish properties into separate trusts. Those trusts were specifically designed to keep the property out of reach of creditors. Meaning: abuse survivors who might file claims.
Then in 2024, after settling 67 abuse lawsuits for $34.5 million and facing 119 more, the diocese filed for bankruptcy protection.
Since then, they’ve spent $2.1 million on legal fees — more than 5% of their remaining assets. $842,262 went to their own lawyers. A Minnesota firm called Fredrikson & Byron.
Meanwhile, 119 abuse survivors wait.
The bankruptcy judge, Heather Cooper, said what everyone is thinking: “My concern is that I don’t want it all going to the professionals. I do think that the survivors probably would like to have something left over at the end of the day.”
Here’s what I think about this.
I don’t blame the diocese for filing bankruptcy. Bankruptcy is a constitutional right. It’s in Article I. I’ve said this a thousand times.
What I blame them for is the hypocrisy.
The Church uses bankruptcy to protect assets, restructure debts, and get a fresh start. Then it turns around and tells you — the person lying awake at 2am wondering how to make minimum payments — that using the same legal tool would be a moral failure.
This is not an isolated case. At least 43 Catholic organizations have filed bankruptcy. Dioceses, religious orders, parishes. They’ve all used the same bankruptcy code, the same courts, and the same legal protections that are available to you.
And it’s not just the Catholic Church. The Crystal Cathedral filed Chapter 11 with $55 million in debt. The Baptist Foundation of Arizona went bankrupt affecting 13,000 investors. First AME Church of Los Angeles filed in 2024. Synagogues and Islamic centers have filed too. According to the American Bankruptcy Institute, an average of 59 religious organizations filed Chapter 11 every year between 2014 and 2019. Most of them were small churches — not headlines.
Every one of them had lawyers and financial planners helping them use the system strategically. And every one of them belongs to an institution that tells you it’s shameful to do the same thing.
Debt is math, not morality.
The Vermont diocese looked at $35 million in assets and 119 claims and made a rational decision. They didn’t pray the debt away. They didn’t make a budget. They didn’t call a credit counseling agency.
They filed bankruptcy.
If you’re sitting in a pew this Sunday drowning in debt, being told that your obligation to creditors is a spiritual matter — look at what your institution did when the math stopped working for them.
Federal Reserve research proves that people who file bankruptcy recover faster financially than those who don’t. Credit scores rise. Stress drops. Savings start again.
The moral framing around bankruptcy isn’t theology. It’s creditor marketing.
If bankruptcy isn’t shameful for an institution, it’s not shameful for you.
I wrote a full breakdown with the numbers, the judge’s quotes, and what this means for your options: The Vermont Catholic Diocese Filed Bankruptcy. So Why Are You Being Told It’s Shameful?
My advice is always just input. Only you can decide what’s right for you. But I want you to have all the information — including the information that the people telling you bankruptcy is shameful are using it themselves.
If this made you think differently about your own situation, forward it to someone who needs to hear it.
— Steve