THE JERUSALEM INSTITUTE OF JEWISH LAW 
Rabbi Emanuel Quint, Dean 

Lesson # 80 • LOANS • To lend to the poor and not to oppress him

With this lesson we begin a new topic. The collection of loans. Reuven has loaned money to Shimon. Shimon doesn’t repay. What remedies are available to Reuven to get his money back?

As stated in lesson 45 (Torah Tidbits 427): 
“It should be remembered that it is a Torah commandment and the responsibility of every Jew to lend money to those who are in need, even if the needy person is wealthy. In the phrase “If you lend money to any of My people” (Exodus 22:24), the word “if” is not fully permissive. It permits the lender the right to refuse only if he is not in a position to lend. If he can lend, however, he must surely do so. Maimonides enumerates this as positive commandment 197, one of the 613 commandments.” 

Maimonides lists eight degrees of tzadakah, the highest form is to give a person a loan, or a gift in such manner as will enable him to be independent and not have to depend upon other people, or to go into business with him or finding him work. This is based on the Talmudic passage that the highest form of good deed to the poor is to enable the poor to go into business. (Shabbat 63a.) 

Loans should be made to the rich as well as the poor. Sometimes the giving of good business advice is also accounted as doing a virtuous deed. In making loans, assuming equal needs, the relatives of the lender have the highest priority; then the members of the household; then the members of the community; then the members of the land. Part of the commandment to loan includes the command not to try to exact payment from the borrower when he does not have the ability to repay.

Just as there is a command to lend, this is balanced by an admonition to the borrower to return the money or the thing borrowed. If he borrower has the means to repay and makes the creditor come back time and time again to get paid, he transgresses the admonition “Say not to your neighbor, Go and come again” (Proverbs 3:28). The borrower should not borrow unless he has the need for the money, nor shall he be frivolous with the money that he has borrowed, nor should he dissipate his assets so that he will no longer have assets to repay the loan. 

There are various times when a lender may be concerned with the assets of the borrower and seek to have collateral security on hand for the repyament of the loan. It may be that he requests collateral (a) at the time of the making of the loan so that he will have security on which to make a levy in the even the borrower does not repay the loan; or (b) subsequent to the making of the loan and before the time to repay has arrived, when the lender thinks that the borrower is dissipating his assets and will not have the funds to repay the loan on its due date; or (c) when the time for repayment has arrived but the borrower is not prepared to repay and the the lender does not wish to commence a lawsuit to enforce repayment at that time but will feel more comfortable if he now obtains collateral security to be used if the borrower does not repay the loan; or (d) the time for payment has arrived and the borrower requests more time to gather the money to pay, and the lender now feels insecure without collateral; or (e) at the time the lender is in a position to enforce collection of the loan from the assets of the borrower by having a levy made on the assets of the borrower after judgment has been obtained and not paid. The term levy means to seize assets of the borrower to pay the moneys due to the lender. 

Generally speaking, the lender may not enter the house of the borrower. He may not seize collateral by himself prior to the due date of repayment of the loan, nor on the due date nor thereafter. The lender may not enter the house of the borrower even to make an inventory of the articles in the home of he borrower to have available to levy upon if the borrower does not repay the loan. 

There are five cases in which a person may enter into someone else’s house to seize chattels. 

1. If the debt arises from a labor or rental agreement, the laborer or the lessor may enter the premises of the employer or lessee to seize collateral to be available when he obtains a judgment for the labor or the rental. The rental may arise from renting himself (the laborer) out to the employer, or rental of one’s real property or personal property.

2. The lender may enter the premises of the guarantor of a loan to seize assets on which to later make a levy after the borrower has failed to make payment of the loan, since he is not entering the house of the borrower. The Torah prohibition against entering the home of he borrower applies only to the borrower and not to the guarantor of repayment of the loan. 

3. If the owner of an object that has been robed or stolen from him sees the object in the home of he robber or thief, the owner may enter to retrieve his object. 

4. A person who sells on credit may enter the home of the customer to seize a chattel on which to levy for the unpaid extended credit. 

5. If a bailee has not returned the object bailed to the bailor/owner, the owner may enter the home of the bailee to retrieve the object.

The lender, if he did not receive collateral at the time the loan was made must make an application to Beth Din for an order to compel the borrower to give hi collateral. Beth Din should not entertain the application if it is made by the lender prior to the time that the loan is due, unless the lender can prove to the satisfaction of the Beth Din that the borrower is dissipating his assets or some other reason that the lender will have difficulty in enforcing payment when the loan is due. If the due date has arrived the application by the lender shall be made on notice to the borrower unless Beth Din decides that the creditor will be prejudiced by the delay in having the borrower served with an order to appear, and then having to appear. It seems that some borrowers would seek to delay the hearing on whether to post collateral and in the meantime make themselves without assets to pay the creditor even if he will obtain a judgment against the borrower.

In the next lesson IYH we shall discuss a loan to a widow, food preparation articles exempt, necessities to be returned for use by the borrower.

The subject matter of this lesson is more fully discussed in Vol. IV, Ch.97 of A Restatement of Rabbinic Civil Law by E. Quint, published by Jason Aronson, Inc. and on sale at local Judaica bookstores. 

Questions to quint@inter.net.il