This verse may be one of the most misquoted, misunderstood, and misapplied verses in the New Testament. Why? I believe it in part is because of the lingering effect of the teaching on confession by the Roman Catholic Church.
It is also partially due to our inclination to be our own god and savior. Our desire to earn our own salvation and God's love by "doing penance" and our aversion to admitting we need only God's solution to our rebellion. This also feeds into misunderstanding this verse and may likely play an even bigger role in our misunderstanding.
In considering this question of confession, we must ask and answer whether Christ's forgiveness is based on the work of Christ or on some work we must do in addition to that, such as confession of sins.
The proper interpretation of this verse can be resolved with sound hermeneutics.
Instead of extracting the true meaning of this verse (exegesis) we tend to read into it what we believe it means (eisegesis) beforehand. To clearly understand this verse we must understand the context of this entire letter and the immediate context of the verses before and after as well as all of scripture.
John opens the book by talking about Jesus. Who he is and John's firsthand experience of seeing, hearing, touching, and living with Christ while he was on earth.
The Word of Life
1Jn 1:1 That which was from the beginning, which we have heard, which we have seen with our eyes, which we looked upon and have touched with our hands, concerning the word of life — 2 the life was made manifest, and we have seen it, and testify to it and proclaim to you the eternal life, which was with the Father and was made manifest to us — 3 that which we have seen and heard we proclaim also to you, so that you too may have fellowship with us; and indeed our fellowship is with the Father and with his Son Jesus Christ. 4 And we are writing these things so that our joy may be complete.
We can see from the opening John's desire in writing this letter is so his readers would come to know Jesus in the same way John does, " ...so that you too may have fellowship with us..." and "so that our joy may be complete..."
John not only desires that his readers are sure of their salvation but that John is also sure of their salvation and finds joy and assurance in knowing and having fellowship with them. In short, his desire is to help his readers be sure they truly know Christ and how they can be sure.
He also restates this objective in the conclusion near the end of the book...
1Jn 5:13 I write these things to you who believe in the name of the Son of God, that you may know that you have eternal life.
When you read everything in between these opening and closing statements, John repeatedly gives ways one can know if they are true believers or not. There are several "if...then" scenarios John lists throughout the book indicating what a true believer looks like, how we can know if we are a believer, and what to do if we are not.
1Jn_2:4 Whoever says “I know him” but does not keep his commandments is a liar, and the truth is not in him,
1Jn_2:5 but whoever keeps his word, in him truly the love of God is perfected. By this we may know that we are in him:
1Jn_2:6 whoever says he abides in him ought to walk in the same way in which he walked.
1Jn_2:9 Whoever says he is in the light and hates his brother is still in darkness.
1Jn_2:10 Whoever loves his brother abides in the light, and in him there is no cause for stumbling.
1Jn_2:11 But whoever hates his brother is in the darkness and walks in the darkness, and does not know where he is going, because the darkness has blinded his eyes.
1Jn_2:17 And the world is passing away along with its desires, but whoever does the will of God abides forever.
1Jn_2:23 No one who denies the Son has the Father. Whoever confesses the Son has the Father also.
1Jn_3:7 Little children, let no one deceive you. Whoever practices righteousness is righteous, as he is righteous.
1Jn_3:8 Whoever makes a practice of sinning is of the devil, for the devil has been sinning from the beginning. The reason the Son of God appeared was to destroy the works of the devil.
1Jn_3:10 By this it is evident who are the children of God, and who are the children of the devil: whoever does not practice righteousness is not of God, nor is the one who does not love his brother.
1Jn_3:14 We know that we have passed out of death into life, because we love the brothers. Whoever does not love abides in death.
1Jn_3:24 Whoever keeps his commandments abides in God, and God in him. And by this we know that he abides in us, by the Spirit whom he has given us.
1Jn_4:6 We are from God. Whoever knows God listens to us; whoever is not from God does not listen to us. By this we know the Spirit of truth and the spirit of error.
1Jn_4:7 Beloved, let us love one another, for love is from God, and whoever loves has been born of God and knows God.
1Jn_4:15 Whoever confesses that Jesus is the Son of God, God abides in him, and he in God.
1Jn_4:16 So we have come to know and to believe the love that God has for us. God is love, and whoever abides in love abides in God, and God abides in him.
1Jn_4:18 There is no fear in love, but perfect love casts out fear. For fear has to do with punishment, and whoever fears has not been perfected in love.
1Jn_4:21 And this commandment we have from him: whoever loves God must also love his brother.
1Jn_5:1 Everyone who believes that Jesus is the Christ has been born of God, and everyone who loves the Father loves whoever has been born of him.
1Jn_5:10 Whoever believes in the Son of God has the testimony in himself. Whoever does not believe God has made him a liar, because he has not believed in the testimony that God has borne concerning his Son.
1Jn_5:12 Whoever has the Son has life; whoever does not have the Son of God does not have life.
The point is this letter is not only for believers. In fact, as already mentioned in significant part, it is seeking to help his readers determine whether they are true believers or not and how they can know for sure i.e. he's also addressing potential unbelievers who might be reading this.
So given this context, what exactly is 1 Jn 1:9 telling us?
1Jn 1:9 If we confess our sins, he is faithful and just to forgive us our sins and to cleanse us from all unrighteousness.
This is one of several "if...then" scenarios John gives in the opening part of his letter in the hope of passing on to them his first-hand experience of Christ so they too might know if they are true believers. He gives some preliminary scenarios on how to do so i.e. if we say or do (see list below) e.g. confess our sins, then this is what it says about us and what we need to do about it.
1Jn_1:6 If we say we have fellowship with him while we walk in darkness, we lie and do not practice the truth.
1Jn_1:7 But if we walk in the light, as he is in the light, we have fellowship with one another, and the blood of Jesus his Son cleanses us from all sin.
1Jn_1:8 If we say we have no sin, we deceive ourselves, and the truth is not in us.
1Jn_1:9 If we confess our sins, he is faithful and just to forgive us our sins and to cleanse us from all unrighteousness.
1Jn_1:10 If we say we have not sinned, we make him a liar, and his word is not in us.
We will come back to these verses later.
After going through this introduction John lays out the basis for our forgiveness in I John 2:1 which clearly says the work of Christ alone is how and why we are forgiven. Nothing can add to or take away from this work.
1Jn 2:1 My little children, I am writing these things to you so that you may not sin. But if anyone does sin, we have an advocate with the Father, Jesus Christ the righteous. 2 He (alone) is the propitiation for our sins...
Propitiation is simply another word for atonement.
G2434 ἱλασμός hilasmos hil-as-mos'
atonement, that is, (concretely) an expiator: - propitiation.
atonement:
1. Satisfaction or reparation for a wrong or injury; amends.
2. Theology. the doctrine concerning the reconciliation of God and humankind, especially as accomplished through the life, suffering, and death of Christ.
Note 2:1-2 is right on the heels of verse 1:9, explaining why God is "just and right" in forgiving those who acknowledge (confess) they sin/are sinners i.e. the basis of our forgiveness is the work of Christ, not our confession.
You will also note, unlike the opening section, he starts out chapter 2 calling his readers "little children" suggesting what he's about to say is for those who know they are genuine believers. Whereas the first chapter, he's clearly attempting to convince those who are not believers why they should be, how they may not be, and some ways to help if they aren't and reassure them if they are.
In the first chapter, he points out that acknowledging we (everyone in general) are sinners i.e. recognizing our sin, is the basis for entry into Christ's forgiveness. This is what 1:9 is clearly telling us. It is not the basis for the ongoing forgiveness of a believer. Again, that is addressed in the following chapter in 2:1-2 (it is also hinted at in 1:7 which we will look at more closely later).
Is confession important
On the matter of confession in general, it is not whether there is value in confessing/ acknowledging/repenting of our sins. Of course, there is. This passage is our proof. We are also encouraged in James 5:16 to confess our sins to one another. However, outside this passage, we don't see anywhere in the NT (and or even in the OT ) that we are told to confess our sins to God to obtain ongoing forgiveness as some suggest this passage teaches. This may be a shock to some. If so, I encourage you to dig into the rest of scripture and see for yourself.
The question is what does God base the forgiveness of our ongoing sins on; the work of Christ or our "confession of sins?" Using 1 John 1:9 to suggest our sins are not forgiven as God's children until confessed to God, not only does not fit the *context of I John itself but the entirety of scripture.
As true believers, we must acknowledge our sins i.e. clearly admitting when and where we commit them and turn from them in order to participate in and experience all God has for us so we might advance in our walk with God, but not in order to be forgiven. Admitting where we blow it is for our benefit and that of others, not for God's. He's already entirely forgiven us (for sin's past, present, and future) in Christ because all that is necessary to do so, has already been done by Christ, not us.
Verbal consent or true repentance
True confession (actually it would be more correct to say true repentance) includes not simply admitting we sin but a full turning away from it, not merely verbally acknowledging (i.e. confessing) our sin. If there is no turning away (repentance) we are not truly recognizing our sin for what it is i.e. not really confessing it. Turning away from sin (i.e. rebellious distrust of God) is the point of true "confession" by a believer. Forgiveness is not.
Simple verbal admission of sin is actually harmful if we believe it's the grounds for our forgiveness or the goal of our confession. The goal of confession in this approach becomes forgiveness only. Once we have confessed, mission accomplished...our sins are now forgiven (or so we are told). Nothing else needs to be done. This allows us to not truly address our disobedience and turn away (repent) from it (but actually an excuse to avoid it) since our obedience is not the goal of this kind of confession, only forgiveness is... or so we think. In a roundabout way, it actually makes light of the destructiveness of sin. It's not a big deal when we sin. We can simply confess it and it's taken care of.
True confession (repentance) for the believer is turning away from sin, not just admitting we have sinned. For the unbeliever, however, admitting they are sinners who have sinned is an absolute prerequisite to receiving forgiveness. Hence John's comments in 1:8-9.
1Jn_1:8 If we say we have no sin, we deceive ourselves, and the truth is not in us. 9 If we confess our sins, he is faithful and just to forgive us our sins and to cleanse us from all unrighteousness.
If we do, we are promised he is faithful and just to forgive our sins and cleanse us from all unrighteousness. Why? Because in 2:1-2 we are told Christ is the basis of that forgiveness. Confession is merely the means by which forgiveness comes to the unbeliever, not the cause of it, even for the unbeliever.
We have further confirmation of this in Verses 7 - 10. These are scenarios addressing whether we are a believer or nonbelievers. The point is he is giving hypothetical examples of what needs to happen if a particular problem presents itself. John tells us if we claim to be a believer but do certain things, we simply are not a believer.
1Jn_1:6 If we say we have fellowship with him while we walk in darkness, we lie and do not practice the truth.
1Jn_1:7 But if we walk in the light, as he is in the light, we have fellowship with one another, and the blood of Jesus his Son cleanses us from all sin.
Walking in the light (vs 7) is clearly a reference to believers in contrast to unbelievers who walk in darkness (vs 6). Note that confession plays no role in the blood of Jesus cleansing those who walk in the light from sin. It is ongoing merely by virtue of them being (walking) "in the light" i.e. being a true believer. This simply means they are believers in contrast to an unbeliever. In fact, this is the only reference to a believer in these opening "if/then" scenarios. But only to make a point of contrast to the unbeliever.
If we walk in disobedience to Christ (walk in darkness) we are not truly believers (we lie) but if we are a believer, our walk will be characterized by the faithful pursuit of God (walking in the light). We will also love being with other believers (i.e. "...have fellowship with one another..."). And since forgiveness is based on the blood of Christ, it covers whatever sins we do commit ("...the blood of Jesus his Son cleanses us [present continuous action in the Greek] from all sin..."). Being a Christian doesn't mean we are sinless/perfect, it means we are forgiven ("it is finished" and not because of our efforts...including "confessing our sins"). Because of this forgiveness, love, and acceptance in Christ, we desire and seek to be faithful.
1Jn_1:8 If we say we have no sin, we deceive ourselves, and the truth is not in us.
1Jn_1:9 If we confess our sins, he is faithful and just to forgive us our sins and to cleanse us from all unrighteousness.
If we think we do not have a sin issue, we are deceived. However, if we admit (confess) that we do, he is faithful to forgive our sins because of the work of Christ on our behalf (vs 2:1), not our work of confession.
1Jn_1:10 If we say we have not sinned, we make him a liar, and his word is not in us.
If we deny we have a sin issue, this is evidence we do not know him at all. Being aware of our sin is actually evidence we know him. Again this is one of several "markers" given by John to help his readers know if they are true believers or not.
As you look closely at the context of chapter 1 it becomes clear he is appealing primarily to nonbelievers in these early verses.
Based on the context of the book of John, the common explanation that ongoing forgiveness of the believer requires our confession simply doesn't fit the context of the book and is an example of poor hermeneutics. We also know from the rest of scripture that all our sins, past, present, and future were nailed to the cross and we are now clothed in the perfect righteousness of Christ. Nothing we do or don't do can add to or take away from our absolute and perfect righteousness and forgiveness earned for us by Christ and assigned to us by His Father.
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Loving parents don't chide their child when they take their first steps only
to fall down again and again. No, they applaud their child for every successful
step they make and encourage them to get up and try again and keep trying until
they are great at it. 
