Forgive Us Our Debts: How Black Churches Use Bankruptcy to Survive

When it filed bankruptcy in June 2020, the Cathedral of the Holy Spirit was known as Prayer Tabernacle Church of Love. Bishop Kenneth Moales Sr. founded the church in Bridgeport, Connecticut, in the early 1970s. At its height, the congregation numbered close to a thousand members. I spoke with Pastor Kenneth Moales Jr., Bishop Moales's son, about eighteen months after Prayer Tabernacle filed bankruptcy.

Although the church did not have any millionaire congregants, as described by Pastor Moales, it had “strong blue-collar low-middle-class” members eager to see the church succeed. As its congregation grew, Prayer Tabernacle needed to expand. To build a ministry center that could seat fifteen hundred people, as desired by the congregation, Prayer Tabernacle needed a loan. And it would have to build from scratch because there was nothing in Bridgeport sufficiently large to convert into what Bishop Moales and church members contemplated.

Bishop Moales and Pastor Moales approached five different banks for a loan. They estimated that the church needed $6 million. That estimate reflected the size of the proposed building, which needed space to include the church's day care and school. It also reflected real property values and the construction costs in Connecticut. All five banks turned them away, including the local bank with which the church had done business for thirty-five years.

Only then did Prayer Tabernacle hook up with a prominent Christian-based lender—Foundational Capital Resources (FCR). FCR provided Prayer Tabernacle with a more than sufficient loan and even helped it with construction plans. At first, FCR did not talk finances. It talked faith and vision. Still, the loan FCR sold to Prayer Tabernacle came with a seemingly high interest rate and onerous terms. Terms that the church rather quickly could not meet.

Prayer Tabernacle scrambled. It completed construction of its new sanctuary, barely. But Prayer Tabernacle's finances were left in shambles. And after a decade of precarious worship in a building constantly under threat of being taken away, a state court judge ordered Prayer Tabernacle's eviction for failure to pay FCR. At that point, the church owed much more to FCR than its original loan amount. This prompted Prayer Tabernacle's bankruptcy filing.

Prayer Tabernacle's journey to bankruptcy court, and then through the reorganization process, is one of seven churches' stories profiled in Forgive Us Our Debts—six Black churches and one white church. These seven churches' stories link the United States' long history of predatory lending to Black churches' predominance in bankruptcy courts. At its core, Forgive Us Our Debts is about lending to Black-owned businesses. And it is a study of Black communities' fighting back against attempts to extract wealth.