Parashas Ki Teiztzei discusses collecting debts: “Do not take a pair of millstones—not even the upper one—as security for a debt, for he would be taking a life in pledge” (Devarim 24:6).
We are instructed by the Pasuk to be sensitive to the needs of debtors. Taking their essential work tools as a pledge would deny them the means to secure funds to pay back the debt. While a creditor may take steps to ensure that money he loans out is repaid, this should not be done in a cruel and inconsiderate way, but in ways that take the hardships and basic needs of the debtor into account.
The Mishnah teaches that a creditor always has to allow the debtor to keep basic working tools: “Not only the millstones and the upper stone, but even any tool that is utilized for purpose of sustenance, as it says: ‘for he would be taking a life in pledge’” (Bava Metzia 9:13). This halacha, and related laws—such as the obligation to leave behind basic living requirements—is ruled by the Rambam (Malveh Veloveh Chap. 3) and by later authorities.
While the laws of taking security can be relevant even today, far more common is debt collection. The Pasuk in Shemos (22:24) notes, alongside prohibitions related to taking security, the obligation of sensitivity when seeking to collect a debt: “If you lend money to one of My people among you who is needy, do not treat him like a creditor.” We need to treat debtors humanely, and not see them only as objects of debt from whom money needs to be extracted.
This can often lead to delicate situations. To what degree can a person apply pressure to collect money he is owed? What is the halacha when the creditor does not know the debtor’s financial situation? What can a person do to collect debts when the Beis Din proves ineffective? And which chattels must be left with the borrower, and not taken in the collection process?
These questions, and others, are discussed below.
Pressing for Payment
The Torah prohibits creditors from pressuring debtors in distress to repay their loans. This halacha is ruled by the Rambam (Malveh Veloveh 1:2): “Whenever a person presses a poor person for payment when he knows that he does not have the means to repay the debt, he transgresses a negative commandment.”
Of course, a debtor himself has an absolute obligation to pay back his creditor, and may not shirk his responsibility due to lack of funds. Nevertheless, creditors are commanded by the Torah to not “act towards him as a creditor.” Although it may be far from easy, a creditor must wait patiently until his debtor has the means to repay the debt.
Furthermore, Chazal state that a creditor is obligated to take measures to ensure that his debtor will not feel uneasy due to his inability to repay the loan. The Gemara (Bava Metzia 75b) writes that a creditor may not even pass by his debtor in the market, because visual contact will cause the debtor shame.
This, too, is ruled by the Rambam: “It is forbidden for one to appear before a person who owes him money when he knows that the debtor does not have the means to repay the debt. It is even forbidden to pass before him, lest one frighten him or embarrass him, even though one does not demand payment.” While not necessarily the letter of the law, it is told that the Chafetz Chayim would go to great extremes to ensure that he avoided all contact with debtors.
Nonetheless, it is permitted to courteously request that a debtor ensure that he have the money to repay the debt. As the Kesef HaKodashim (Choshen Mishpat 97) writes, a creditor can tell his debtor that whenever he has the money, he should be sure to repay the debt.
When in Doubt
In modern times, it is not always easy to gauge a debtor’s financial condition. For all the creditor knows, he might have a foreign bank account, or may have other investments that can be utilized for paying the debt. In addition, a creditor has the right to collect a debt from the debtor’s belongings, provided he is not deprived of basic necessities. This adds to the doubt a creditor often has concerning his debtor’s means.
In situations of doubt, the Kessef Hakodashim (97) writes that it is permitted to request payment. The doubt is not considered a safek in a Torah law, since the prohibition against demanding payment applies only to somebody the creditor knows cannot pay. The same conclusion is noted by the Minchas Chinuch (67), based on the wording of the Chinuch, who writes that one much not claim his debt from a debtor to cause him anguish.
Rav Shmuel Wosner zt”l has likewise written that the prohibition of pressuring a debtor is no longer commonly applicable today. The creditor can always seek to collect the debt, in the hope that the debtor will be able to pay it back one way or another (Shevet HaLevi vol. 10, no. 267). This is based on the opinions above, who write that the prohibition only applies when the creditor knows with certainty that the debtor lacks the means for repayment, or when the debtor has earlier debts large enough to cover his entire estate.
Rav Moshe Shternbuch (Teshuvos VeHanhagos Vol. 3, no. 471:7) has written that if the creditor has no intention to collect possessions in repayment, but wishes to accept cash alone, the debtor’s possessions are not sufficient to permit demand of payment. There is room to dispute this ruling, since the debtor can of course sell some of his possessions to pay his debts.
Loans for Checks
An interesting question arises when the debtor exchanged the loan for a check—a common method by which a debtor relieves his creditor’s fears concerning collection. When the time of repayment arrives, the creditor is informed that the debtor’s account is deeply in the red, and that cashing the check will gravely accentuate his troubles. Is it permitted for the creditor to cash the check, or must he fear the prohibition of acting like a creditor?
It seems the creditor may present the check to his bank, and need not worry about the prohibition. The Shulchan Aruch (Choshen Mishpat 97:28) states that if a condition was made in advance, by which the debtor waives his right to withhold even the most essential possessions from the creditor, the condition is binding. In a similar vein, giving a check up front constitutes a waiver of the debtor’s right in respect of the check. The creditor can therefore cash it, as initially agreed.
Furthermore, even if the condition is not valid, there is room to argue that cashing in a check does not infringe the prohibition of acting like a creditor. Strictly speaking, depositing a check collects money from the debtor’s bank, and not from the debtor himself, if has no money to pay. Although the debtor is thereby forced to borrow money from the bank, cashing a check is thus fundamentally different from direct methods of collecting the debt, and therefore seems to be permitted (this possibility is raised in Hacheck BeHalachah, Chap. 10, section 1).
It is similarly permitted for a creditor in possession of a check to have ongoing contact with the debtor. By contrast with an ordinary debtor, who lacks the means to repay his debt, the check held by the creditor is a valid method of repayment which the creditor has the right to collect. There is therefore no fear of shaming and oppressing the debtor due to his inability to repay the loan.
The option of cashing in a debtor’s check only applies when the check was wilfully given over by the debtor. If the debtor does not offer it, a creditor may not forcibly extort a check from a debtor whose account is in arrears, and doing so would transgress the prohibition of acting like a creditor.
Debt Collection and the Letter of the Law
Those who have had to visit Beis Din to collect debts know that managing to drag the debtor to Beis Din is generally not the end of the story. According to the letter of the law, Beis Din has to initiate a procedure of sidur—an “arrangement” that leaves the debtor with bare essentials alone, and allows the remainder of his property to be appropriated by the creditor.
In the words of the Shulchan Aruch (Choshen Mishpat 97:23), the debtor is obligated to present all his material possessions, down to the last needle. Apart from a bed and bedding on which to sleep, basic clothing (enough to last twelve months), food (thirty days), food utensils (including a table and chairs), and “tools of the trade,” the debtor retains none of his property.
It is not difficult to understand the general aversion of Beis Din to enacting this procedure—to leave a person with nothing but a bed, some clothing, and a little food, is hardly a comfortable assignment. Yet, this is the halachah, and it remains somewhat odd that the principles of siddur have fallen into neglect. Din, in the final analysis, is precisely that—strict judgment, which leaves no room for compassion. The debtor may be in an unfortunate position, but this does not affect the creditor’s right to his money. Why then has the siddur procedure fallen out of fashion?
It seems the reason why the ruling of siddur is uncommon today is the change of social climate and financial circumstances that modern times have brought about. In the times of Chazal and classical Poskim, the second-hand market reflected the true condition of an item. A second-hand item of clothing, in good condition, could be sold for close to the price of a similar new item. Today, however, this is certainly not the case, and second-hand goods are sold for extremely low prices, which do not reflect their actual usefulness to their owner.
Batei Din may therefore sense that the siddur procedure, whereby the debtor’s goods are evaluated according to the second-hand market, leave the debtor with a very bad deal.
A further consideration is that today, a debtor left with barely a roof over his head, without a phone or other means of communication, Shabbos clothes (according to one opinion), and so on, will be practically unable to bear the blow. In previous generations, it was not uncommon to find individuals arriving in a town with nothing but a small bag of basic belongings. Today, such individuals are rare. Beis Din therefore fears to enact the siddur procedure, because of the overly harsh effect it could have on the debtor’s life.
Finally, modern standards of living are generally reflected in secular writs of execution, whose criteria are quite different from those of Chazal and the Shulchan Aruch, yet reflect what is considered today as essential. It is therefore possible to extend the siddur arrangement to reflect modern standards because that is the common practice.
In a practical sense, how does one retrieve debts when Beis Din does not prove effective?
The Shaar Mishpat (4:1) writes that when a debt cannot be retrieved by means of Beis Din, it is permitted to use any means at the creditor’s disposal to collect the debt. Rav Wosner (Shevet Halevi Vol. 10, no. 263 part 7) writes that the creditor may not take matters into his own hands, but should rather turn first to Beis Din. If the dayanim see that the debtor is shirking his responsibility, and if no agreement between the parties is reached, Beis Din will permit the creditor to make use of the secular courts to collect the debt.
Rav Moshe Sternbuch (Teshuvos Vehanhagos Vol. 3 no. 442) adds that Beis Din only permits the creditor to make use of secular collection methods under the conviction that the debtor possesses the means to repay the debt. If Beis Din is convinced that the debtor lacks the means to repay the debt, the creditor is left with no option but to wait for the debtor’s fortune to change.
Provided that permission from Beis Din was received to turn to the secular legal process, the creditor can reclaim certain expenses incurred in the collection process from the debtor (Rema, Choshen Mishpat 14:5). This applies also if the debtor totally refused to go to Beis Din, causing the creditor to incur extra expenses.
- If a creditor knows that a debtor lacks the means to repay a debt—including property and other belongings—it is prohibited to make attempts to collect the debt.
- It is even prohibited to claim payment from a debtor who lacks the means to repay a loan, and a creditor should not even pass by his debtor in the street, for fear that this will cause the debtor acute shame.
- When the creditor is unsure of his debtor’s assets, or if he believes the creditor has assets from which the debt may be collected, a creditor should summon the debtor to Beis Din. If the debtor presents no reasonable alternative, Beis Din will allow the debt to be collected by means of secular collection procedures.
- If the debtor willingly handed the creditor a check from which the debt can be repaid, the creditor may present the check to the bank without inquiring about the debtor’s financial condition.