Question:

Considering that there are numerous people which I owe money to. Does halacha dictate any specific order in which to pay back?
Older debts vs New.
Large vs small sums of money.
Family vs acquaintances
Current workers who are owed for work vs. people who are no longer on my staff

Answer:

Answer by Horav Y. Fleishman shlit”a.

Sorry for the delay in getting back to you.

If you are paying with cash or moveable goods there is no order (Choshen Mishpot 104, 3). There is preference for workers who are being paid on time but otherwise not. If you are paying with a house e.g. you have so many debts that it is necessary to sell your house there would be order sometimes-if so ask and I’ll answer but if not there is no order except workers who need to be pd on time. See Ahavas Chessed Chapter 10

About how much to pay each if you can’t pay all in full there is a machlokes and Shulchan Aruch (104, 10 ) rules that you pay all the same amount. However, many say that the minhag today is to pay a percentage. The Aruch Hashulchan says that one should compromise i.e. take into account somewhat to pay larger debtors a bit more.

One also has to take into account that sometimes beis din will allow you to pay current workers so that you should be able to pay old debts as well. For example, if you can’t pay current workers and therefore need to close down the business which will close off the source of future revenue jeopardizing your chances of paying anyone in the future beis din may allow you to pay current workers at the expense of others because it is in everyone’s interest.

It is important to note that when you say you can’t pay your debts it really means you don’t have anything-one has to sell assets and curb expenditures drastically before saying he can’t pay debts and one has to allocate money to paying his debts before many other expenditures i.e. before you take a vacation or send your kids to camp or buy a lulav and esrog and many other expenses you need to pay your debts (Choshen Mishpot 97,23)

Sources:

 

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2 Responses to “Who do your pay back first?”

  1. What if kids will be hurt substantially by not going to camp or not being provided other needs that are the standard among-st their peers?

    • Each situation has to be evaluated individually, however the basic idea is true that when a person has outstanding debts he has to do all he can to pay it up.

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