We explore some of the biblical passages about collateral in the section, “Bankruptcy, debt forgiveness and loan modification”. The mainstream Christian view is that using your house as collateral for a loan is not contrary to biblical teaching. This view is consistent with our arguments regarding the God-intend role of finance in society. However, in light of Proverbs 22:26-27 and in light of the biblical teaching to be prudent risk takers, it seems that at a minimum lenders should not accept a house as collateral unless they are very certain that the borrower will be able to repay the loan. Similarly, according to biblical teaching, homeowners should not pledge their home as collateral unless they are very certain they will be able to repay the loan. This is in stark contrast to current lending practices in many developed countries which allow a person to get a loan which is quite large relative to their level and stability of income and relative to their history of repaying debts. With collateral there is a tendency for the lender to think “I can foreclose if need be, so I don’t need to think too hard about whether this is good for the borrower or can be repaid” and a tendency for the borrower to think, “If I cannot make my payments the bank can have the house and I’ve done no harm.” Neither party’s thinking is consistent with biblical teaching and with the God-intended role for finance as a form of justice and love.