Paying a debt early

Hi,

Within Jewish law, it is assumed that the reason to set a payment date is to benefit the borrower, by protecting him from collection before that date. Therefore, under normal circumstances, a borrower who wishes to pay early is allowed to do so.

However: Where the borrower wishes to pay early because of tax considerations or market factors, such that early payment would harm the lender, then the lender is not obligated to accept the early payment.

(Pitchei Choshen, Halvaah 3:10-11)

Have a great day,
Mordechai

Claiming a debt on Shabbat, Yom Tov or Chol haMoed

Hi,

One may not claim re-payment of a debt on Shabbat or Yom Tov, even where the debt was of food rather than money. However, one may claim it on chol hamoed.

(Pitchei Choshen Halvaah 3:6)

Have a great day,
Mordechai

Thirty days

Hi,

If a date for re-payment of a debt is not set, the default halachic assumption is that the loan is for a thirty-day period. However, where local practice sets a different default period, this is the period that the lender and borrower should follow.

(Pitchei Choshen Halvaah 3:5, and footnote 12)

Have a great day,
Mordechai

Claiming a loan early: Exceptions

Hi,

We have said that one may not claim payment of a debt until the time that was set for payment. However, one who sees that the borrower is liquidating his assets may claim early. Also, where a loan is linked to specific conditions, and the borrower fails to meet those conditions, the lender may claim immediate payment of the debt.

(Pitchei Choshen, Halvaah 3:3-4)

Have a great day,
Mordechai

Claiming a debt early

Hi,

A lender is not permitted to claim a loan before it is due. However, the borrower is not permitted to delay once the loan is due.

(Pitchei Choshen, Halvaah 3:1-2)

Have a great day,
Mordechai

The expenses involved in claiming a debt

Hi,

Although we say that a borrower is obligated to pay for expenses in setting up a loan, such as in writing up the loan agreement, a borrower is not obligated to reimburse a lender for expenses incurred in claiming payment of a debt, including in suing him in beit din [rabbinical court].

(Pitchei Choshen, Halvaah 2:41)

Have a great day,
Mordechai

Repaying a debt

Hi,

Repaying a debt is a mitzvah.

(Pitchei Choshen Halvaah 2:1)

Have a great day,
Mordechai

Specifying the type of repayment for a loan

Hi,

One who is asked for a loan by someone in need may specify that the payment should not be broken down into very small installments. However, if these small installments would not harm his economic well-being, then he should not insist on this.

(Pitchei Choshen, Halvaah 1:7)

Have a great day,
Mordechai

Loans in a currency that is dropping in value

Hi,

It is assumed that lenders who lend money for periods longer than a day intend to be repaid in a stable currency, even if the actual currency which changes hands is dropping in value rapidly. However, the lender really should stipulate this.

(Rav Moshe Feinstein, Igrot Moshe Orach Chaim 5:43:3)

Good moed,
Mordechai

Collecting from a third party

Hi,

If a borrower gives all of his assets away to a third party, the creditor may claim his debt from that gift. However, the creditor does not have the right to collect from any profit made by the third party from those assets which were given to him.

(Shulchan Aruch Choshen Mishpat 99:6)

Have a great day,
Mordechai

Trusting court documents

Hi,

We have already said that there is no statute of limitations on collecting a loan (aside from the shemitah nullification of debts).

However, if a creditor produces an old document, the judge is required to investigate why it had not been collected until now, and to double-check its veracity, in order to ensure that there is no trickery afoot.

(Shulchan Aruch Choshen Mishpat 98:2)

Have a great day,
Mordechai

Statute of limitations on a debt

Hi,

There is no statute of limitations on a debt; even if many years have passed without an attempt at collection, so long as the bill of debt is valid and so long as a shemitah [Sabbatical] year has not passed since the debt came due [which would have automatically nullified it], the debt may be claimed when the creditor produces his legal document in a Jewish court.

(Shulchan Aruch Choshen Mishpat 98:1)

Have a great day,
Mordechai

Collecting from the family of a borrower

Hi,

A creditor is not able to claim property of a borrower's wife or children (with a few exceptional property items), even if the property was only recently purchased for them and never even used.

(Shulchan Aruch Choshen Mishpat 97:25-26)

Have a great day,
Mordechai

Collecting on a loan by force

Hi,

We have seen that Jewish law severly limits what a creditor may do, in terms of taking collateral.

However: If a debtor defaults, a Jewish court is able to confiscate his property, hold it for thirty days, and then - if the borrower still has not paid - sell it for payment to the creditor.

This ability of the court is limited to confiscating assets which are not needed by the borrower for his day-to-day life.

(Shulchan Aruch Choshen Mishpat 97:17)

Have a great day,
Mordechai

Forcing a borrower to seek employment

Hi,

If a borrower defaults on a debt, the Jewish court cannot force him to seek employment in order to be able to pay off the debt. The possibility of non-payment is an accepted risk of lending money.

(Shulchan Aruch Choshen Mishpat 97:15; Sefer Meirat Einayim to Choshen Mishpat 97:29)

Have a great day,
Mordechai

A borrower's responsibility to re-pay

Hello,

We have seen that we are obligated to extend loans. However, the borrower is also obligated to re-pay. It is prohibited for a borrower to pretend that he is unable to re-pay, even if his intent only to delay repayment for a single day.

(Shulchan Aruch Choshen Mishpat 97:3)

Have a great day,
Mordechai

Collecting on a loan

Hi,

One may not demand collection from a debtor if the debtor has no means of paying the debt; one may not even pass in front of him (to remind him of the debt), if there is no means of re-payment.

(Shulchan Aruch Choshen Mishpat 97:2)

Have a great day,
Mordechai