Hilchos Choshen Mishpat

Volume III : Number 14

Deducting Debts From Maaser

Question:

Reuven lent Shimon $1000, and also sold him merchandise on credit, valued at approximately $2000. When the time came for Shimon to pay, he suffered serious financial setbacks, and was now a poor man, unable to pay his debts. Reuven now has the following questions:

A. Is he (Reuven) permitted to deduct Shimon's outstanding debt from his Maaser obligation?

B. Is Reuven permitted to take up a collection on behalf of Shimon, and then keep the money for himself as repayment for the outstanding debts?

Answer:

A. If at the time of the loan or the sale, Reuven thought to himself that if Shimon would be unable to pay his debt, he (Reuven) would use Maaser funds to pay it for him - Reuven is permitted to do so. It is not necessary for Reuven to inform Shimon of his intention at the time the debt is incurred.
The above Halacha also applies if Reuven signed as a co-signer on Shimon's loan and Shimon then defaulted. As long as before Reuven signed as a co-signer, he thought to himself that if necessary he will use Maaser funds to pay the debt, he may do so. (1)
If at the time of the debt, Reuven did not plan to use Maaser funds, and now that the reality is that he must suffer a financial loss, he wishes to dip into his Maaser account to reimburse himself, he may do so only if the following three conditions are met:
1. That Reuven receives explicit permission from Shimon, the poor borrower, to do so.
2. That Shimon is someone that Reuven would, under other circumstances, disburse Maaser funds to, even if not for the fact that Shimon defaulted on a loan to him.
3. Reuven only deducts from the debt, the amount that he ordinarily would give to Shimon during the entire year.
Based on the above, if someone has lent money to a poor person, co-signed on a loan that was subsequently defaulted, supplied him with merchandise on credit, provided a service or rented him property, and the poor person is unable to pay, he is not permitted to collect the amount owed to him at the expense of his Maaser obligations, unless all three of the above conditions are met. (2)
An individual who is owed money by an impoverished person may collect funds for this person from other donors and retain them in lieu of payment for the money owed to him. The person is not obligated to inform the donors regarding what he intends to do with the funds, nor must he request permission from the poor person prior to making such a collection. However, he may not tell the donors who he is collecting for unless he has prior permission from the poor person to publicize his name and the fact that he is needy. (3)
Sources:

(1) This is discussed in the Gemara in Gittin 30a, in the Rema in Shulchan Oruch, Yoreh De'ah 257:5, and in the Taz, Shach, Gr"a (13), and Pischei Teshuva there.
(2) This Halacha is based on a Teshuva of the Nodeh B'Yehuda (Vol. 2, Yoreh De'ah Siman 199). His reasoning for this is that if we would allow anyone to collect all outstanding debts from Maaser on behalf of anyone who can no longer pay and has declared bankruptcy, it will create an unreasonable burden on the poor. Every business has bad debts that are not collectible, and if we would allow these debts to be retained by the business owner at the expense of his Maaser obligation, no funds would make it to the poor for their daily support, which is what these funds were intended for!
However, if he anyway would have given his Maaser funds to this individual, no other poor people can claim that they are getting hurt by this arrangement, since they would not receive these funds in any case. Therefore, the amount that the poor person would have ordinarily given to pay back the loan may be deducted from the Maaser obligation in lieu of the debt.
The following would be a solution for a co-signer on a defaulted loan, who at the time of the signing, did not intend to use Maaser funds, if necessary. If the poor borrower is around, the co-signer may give him Maaser funds, but stipulate that these funds may only be used to repay the lender. However, if the borrower is no longer around, since the co-signer is now himself a debtor to the lender, he may not use Maaser funds to pay his own debts. A possible solution in this case might be to appoint someone as an agent to acquire the funds for the borrower and pay his debts even without his knowledge, based on the principle of "Zachin L'Adam Shelo B'Fanav"- a person may act as an agent on behalf of his friend even without his friend's knowledge, as long as the result is beneficial for his friend. However, this requires further clarification.
For further explanation on the technicalities of retaining Maaser funds in lieu of debt payment by a poor person, please see my Sefer, Minchas Tzvi (Vol. 3 Siman 9).
(3) This is based on the Rema in Yoreh De'ah 253:12, and the opinion of the Gr"a stated there (18). There is no Geneivas Da'as (misrepresentation) of the donors, since this money will actually be used for the good of the poor. Since no one wishes to be considered a Rasha (wicked person), and Dovid HaMelech states in Tehillim 37:21 "Loveh Rasha V'Loe Yishalem" - the wicked person borrows and does not pay back, it is certainly a benefit for the poor person to erase his debts in this manner.
-------------------------------------------------------------------------
This week's class is based on a column by Rabbi Tzvi Shpitz, who is an Av Bet Din and Rosh Kollel in the Ramot neighborhood of Jerusalem. His column originally appears in Hebrew in Toda'ah, a weekly publication in Jerusalem. It has been translated and reprinted here with his permission and approval. His columns have recently been compiled and published in a three volume work called Mishpetei HaTorah, which should be available from your local Sefarim store.
Feedback is appreciated! It can be sent toatendler@torah.org.
This week's class is based on a column by Rabbi Tzvi Shpitz, who is an Av Bais Din and Rosh Kollel in the Ramot neighborhood of Jerusalem. His Column originally appears in Hebrew in Toda'ah, a weekly publication in Jerusalem. It has been translated and reprinted here with his permission and approval.
We hope you find this class informative and stimulating! If you do not see a subscription form to the left of the screen, access the Advanced Learning Network to subscribe to Business-Halacha.
For information on subscriptions, archives, and other Project Genesis classes, send mail to learn@torah.org for an automated reply. For subscription assistance, send mail to gabbai@torah.org.
Please Note: The purpose of this column is to make people aware of Choshen Mishpat situations that can arise at any time, and the Halachic concepts that may be used to resolve them. Each individual situation must be resolved by an objective, competent Bais Din (or Rabbinic Arbitrator) in the presence of all parties involved!