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Hilchos Choshen Mishpat

Volume IV : Number 2

Collecting Debts the Halachic Way


Question:

In the Torah there is a prohibition of (Shemos 22:24) "Lo S'Hiyeh Lo K'Nosheh" - you should not act like a creditor when collecting a loan. When is it forbidden for a lender to make a claim against a borrower because of this prohibition and when and how is it permitted to claim money from a borrower?


Answer:

There are many factors involved in answering these questions, as follows:

  1. A lender is permitted to request payment from a borrower when a loan becomes due. He need not be concerned that the borrower might not have the funds or property that he could sell to repay the debt. This is especially true if the lender thinks that the borrower has forgotten about his debt. It is only forbidden to claim a debt if the lender knows that the borrower is unable to pay, and claiming the money will only cause him discomfort.

  2. If a lender requests payment of a due debt, and the borrower replies that he does not presently have the funds to repay it, the lender is not obligated to believe this to be true, and is permitted to continue to request payment afterwards, until the borrower presents proof in Bais Din that he is presently unable to repay the debt.

  3. Even if the lender knows for a fact that the borrower does not have cash with which to pay him, he is permitted to request payment if the borrower has property that he could sell. However, this is only true if, after selling property to pay off the debt, the borrower would have enough left over for his basic, minimal, living expenses, and a place to live. This is in accordance with the rule of "Mesadrin L'Baal Chov"- we make reasonable arrangements for debtors, as stated in the Shulchan Oruch, Choshen Mishpat 97:23 (1).

    Similarly, even if he knows that the borrower has no means with which to repay a loan now, a lender may file a claim against a borrower in a Bais Din so that they should confirm his debt, and evaluate the ability of the borrower to repay over an extended amount of time.

  4. As we stated above, a lender is not permitted to demand payment if he is certain that the borrower does not have the ability at all to repay the loan. As a matter of fact, he is also forbidden to frequent areas that the borrower frequents, so that he see him and be uncomfortable. (2)

    This prohibition applies even if the lender did not lend personal funds, but is an officer of a free loan fund that serves the public. He is still forbidden from claiming the funds when he knows for a fact that the borrower simply has no way to repay them at this time. (3)

    All of the above only applies to debts that occur through loans, not to debts that occur through sales on credit, damages, etc.

  5. According to the Torah, a borrower is not obligated to borrow from others to repay his debt. Therefore, if he does not have the funds, it is forbidden to demand payment even in the hope that he will borrow from others to repay you. However, today it is common practice for people who need large sums of money to borrow from one source, and then roll the loan over to another source when it becomes due. Since at the time of the loan they intended to borrow from others to repay you, under these circumstances it is permitted to demand payment, even if you know that the only way they will be able to do so is by taking out a loan from others.

    If, however, the lender knows that the borrower has no other sources of credit, and he does not have possessions to sell with which to repay his debt, the Torah prohibition to claim such a loan remains intact. (4)


Sources:

(1) See the Shulchan Oruch HaRav (GRA"Z), Hilchos Halva'ah, 2,13.

(2) The Gemara in Bava Metziah 75b states "Rav Dimi says, how do we know that if someone lends his friend a Mannah (100 Zuz) and he knows that he does not have it, that it is forbidden to walk in front of him (so that the debtor will see the lender and feel uncomfortable), this is taught in the verse of 'Lo S'Hiyeh Lo K'Nosheh'. It is very clear from this that the prohibition for a lender to claim money from a borrower only exists if he knows that the borrower does not have any way to repay, and despite this the lender demands repayment, or just deliberately makes the borrower uncomfortable with his presence. If the lender is unsure whether or not the borrower has the ability to repay, no such prohibition exists. This is also stated in the Sefer HaChinuch (Mitzvah 67), and in the Shulchan Oruch, Choshen Mishpat 97:2.

Although we generally have a rule that "Sofek D'Oraysoh L'Chumrah", when we have a doubt regarding a Torah prohibition we must be stringent, The Minchas Chinuch (ibid.) explains that this is not relevant in our case for the following reason. By definition, the prohibition of claiming money only exists if you are certain that the borrower in unable to pay, and are trying to make him uncomfortable. If you are in doubt regarding this- there is simply no prohibition at all. Otherwise, most of the time people would be unable to claim loans that they have made, since it is usually impossible to know for certain that the borrower can definitely repay. How is it possible that on the one hand, the Torah obligates a person to lend money to his fellow Jew, and on the other hand will forbid him from requesting payment when it is due?! Therefore, only when the request of the lender will definitely only cause discomfort to the borrower is it forbidden to request payment. If the lender thinks that there is a possibility that he will be repaid, and demands the money so that he should receive what is rightfully his, and not solely to cause discomfort, no prohibition at all exists.

An interesting question that now arises is, if the lender knows that the borrower can not repay, is he permitted to go somewhere where he knows the borrower will be, but is not going there for the purpose of causing him discomfort? Is he obligated to go there at an inconvenient time when he knows that the borrower won't be there, or do we say that although the borrower may have discomfort from seeing the lender there, this is not a reason that should require the lender to inconvenience himself by having to adjust his own schedule and cause himself discomfort - just to prevent his debtor who can not repay him from having discomfort! As of this time, I haven't found anyone who discusses this specific issue, although it seems logical to me that the lender need not inconvenience himself if he needs to go somewhere where the borrower is, as long as he has personal reasons to go there, and has no intention of causing the borrower discomfort.

It would appear from the words of the Aruch HaShulchan (Choshen Mishpat 97:2) that if the lender must frequent places where the borrower is present, he can inform him once that he needs to be there for personal reasons, and is not interested in getting repaid as long as the borrower is unable to repay him. This would resolve the above question in a manner in which no parties need be uncomfortable.

(3) Since the issue here is causing a fellow Jew discomfort for no constructive reason, it makes no difference if the source of discomfort is a lender who lent his own funds, or an official who has lent communal funds. The Chofetz Chaim in his Sefer Ahavas Chessed (7:8) states this clearly regarding the prohibition of going to a debtors home to repossess items (Devarim 24:10), and it would seem that this would apply to our case also.

(4) It is clear from the words of the Shulchan Oruch (Choshen Mishpat 97:23), that although a Bais Din may confiscate property from a delinquent borrower to repay his loan, they do not have the authority to force him to borrow money from others to repay what he has borrowed.

It is also clear from the Teshuvos HaRosh (Klal 68, Siman 10), Teshuvos HaRashba (Vol. 1 Siman 1069), Teshuvos HaRivash (484), and the Shulchan Oruch (ibid. 15), that a Bais Din can not force a borrower to work in order to make money to repay his debt. This is based on the Possuk (Shemos 22:2) "VeNimkar B'Gneivaso" - and he should be sold (into servitude) for his theft, from which we deduce that he can not be sold for a debt incurred in another way. This is true even if the borrower agreed at the time of the loan that if he is unable to pay when the debt is due, he is willing to go to work for the lender to pay off the debt. Even if this was written into a contract, and a Kinyan was made on it, since this is a condition which violates our Torah in a situation which involves personal suffering (Masneh Al Mah SheKosuv B'Torah B'Makom Sheyaish Tzaar HaGuf), it is void. As stated in the Biur HaGrah (97:45), even Rabbi Yehuda, who generally argues with Rabbi Meir (Kesubos 63a) and holds that a condition that violates the Torah is Halachically binding, would agree in this case that it is not Halachically binding.

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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!

 






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