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Funds in an escrow account


Sholem uvrocho.

In a settlement agreement (divorce), Spouse A undertook to pay funds into an escrow account upon obtaining the divorce decree from court. The funds were to earn interest in escrow, but it was agreed that interest would accrue immediately 8 Sept ’23 (even prior to placing the funds in escrow). The funds would ultimately be used to pay children’s maintenance. The court decree of divorce was granted a few months later, on 10 Jan ’24 but funds were not placed in escrow as undertaken by Spouse A. 4 months have now passed and Spouse B wants to claim the original amount + interest that would have accrued to date. Is it muttar ? If not is the attorney who assisted in drawing up the agreement also oiver? Many thanks




No one is oiver here because ribbis does not apply to this situation. The reason is because there was no loan given by the spouse or the child, and the spouse that agreed to put the money in escrow essentially agreed that he will give the children the agreed amount plus whatever amount the bank will give as interest. A similar situation exists regarding paying property tax in Eretz Yisroel (arnona) or other government levied taxes. even if one has to pay what they call interest for paying late, it is permitted. the reason is because they never gave a loan, therefore the person paying it back is not paying extra because of ribbis to a loan, rather an extra charge that he government is charging them.

Best wishes


See Toras Ribbis 10-69 ftnt 114 in the name of R’ S. Z. Auerbach

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