Three years ago, we bought an apartment from a Jew who is committed to the Torah way of life. My husband paid with checks that didn’t go through for some reason, and the owner of the apartment took my husband to court. The court ruled that we were obligated to pay the full sum to the plaintiff (obviously), including interest and linkage differentials, the sum of nearly 200,000 NIS. I am also required to pay court and legal fees.
As of today, I have already paid most of the original sum, and the apartment is finally ours. Now, all that I have left is to pay the legal fees and interest. Being that he is a Torah Jew he will not want to take interest if he knows that it is a terrible sin. I seek your understanding of this matter.
Taking interest from a Jew is a grave sin and causes people lose their fortunes. Halachically, one cannot demand interest from another Jew, although there are those who maintain that it can be demanded form an entity or corporation. This is true even if the other Jew did not follow the rulings of a din Torah. Regarding the linkage differentials, some are lenient and permit taking the part that is the result of the coins decrease in value. They, too, do not permit taking the part that results from other external reasons such as the hiking price of fruits and vegetables due to bad weather or a high demand in the real-estate market.
Additionally, if the plaintiff did not sue in a beis din or receive permission from beis din to sue in court or a debt collection agency, the defendant is not obligated to pay court and legal fees.
Regarding the prohibition of interest there is no difference as to the source of the debt. See Beis Yosef Yore Deah 160:21 where he disagrees with Rabbi Eliezer of Tuch.