When churches begin to go bankrupt, it's an obvious sign that the economy is in dire straits. That's exactly what's happening in Florida as many area churches are filing for Chapter 11 bankruptcy.
Recently, a pastor from Mission Road Church of God in Christ was forced to explain to a bankruptcy official why his church couldn't afford to pay for the construction of its family-life center. The bill came to $1.6 million.
In another case, the Agape Assembly Baptist Church was also forced to file for Chapter 11 bankruptcy after incurring debts totaling $6.6 million and assets of $6.5 million. The church is currently in the foreclosure process.
According to the pastors of these bankrupt churches, congregation members also struggling financially also had an impact on the churches as it's not possible to ask someone to help pay for a churches' mortgage, when a person themselves is also having their own struggles to keep a roof over their head.
When looking at church incomes, many have also reported steep declines. For example, in 2008, the Agape Assembly Baptist Church reported income of nearly $750,000. In 2010, this figure dwindled to just over $300,000. Had revenues remained steady each year, the church would have most likely been able to avoid bankruptcy.
In addition to not receiving as much in donations, pastors are also claiming that banks are no longer as willing to work out financial hardships with churches, and are now more likely to start the foreclosure process.
And this trend of churches filing for bankruptcy is also not just happening in Florida, as nationwide it's estimated that in the past year approximately 100 churches have had to file for bankruptcy protection.
Unfortunately, business bankruptcy is now a concern for everyone, not just profitable organizations. Many financial analysts are blaming the sudden wave of church bankruptcies on the mega-church boom of the late 90s and early 2000s - where churches were profiting. However, now those billion dollar expansion projects can no longer be supported.
Source: Orlando Sentinel, "Even churches are going bankruptcy these days," Jeff Kunerth, 30 Jan 2011