Are the elders or church leadership personally liable for debt of a church?

UPDATED: Sep 30, 2022

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Are the elders or church leadership personally liable for debt of a church?

The pastor of our church has misshandled the financial matters of our church. We are in the

process of elections for new leadership and pastor. The main concern is we will be held

personally liable for the unpaid bills and debt of the church.

Asked on April 21, 2016 under Business Law, Indiana


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

You are not directly liable for the pastor's criminal act (assuming you did not participate in it--that is, you were his accomplices or conspirators), unless you executed some sort of agreement under which you would indemnify (repay) the church for any losses. However, you could be liable for your negligence, or carelessness, if your oversight or supervision was unreasonably lax, so that you should have caught the embezzlement earlier but failed to do so. That failure to take reasonable care to protect church assets could potentialy make you liable for the churchs's losses. But if you took reasonable steps (e.g. had an accountant and annual audit; undertook a deeper review if and when suspicious activity surfaced; etc/), then you should not be liable.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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