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Can a Lender Pursue a Borrower’s Assets?

Rabbi Dovid Grossman

 

Case: In the previous section, we discussed the question of whether it is halachically permitted for a business to attempt to collect receivables. We will now focus on the general question of repaying debts. 

Question: How far may a lender or creditor go in attempting to collect a debt or loan owed to him by another? If the debtor does not have funds, but does have real estate, a car, or other items of value, may one collect from those items? 

Answer: As we mentioned in the previous segment, there is an issur of lo sihiyeh lo k’noshe, prohibiting a lender from attempting to coerce and pressure the borrower to repay if the borrower does not currently have funds available for repayment. However, the borrower certainly still has an obligation to repay the debt.

Question: Is the borrower obligated to use his assets (such as if he has a credit line on his home) to repay the money? 

Answer: The halacha is that one in debt is not obligated to borrow funds to repay the lender. In addition, he is not required to sell important household items, such as critical work utensils or his bed etc., based on the halacha of mesadrin l’ba’al chov, which we discussed last time. Nevertheless, according to halacha, one would in fact be required to sell his other assets to repay the loan. This would include selling his home as well (if it has equity) and renting another house instead. 

Although the halacha technically does not require borrowing for this purpose, many people prefer to take a credit line on the house or take out another loan in order not to be obligated to sell their assets.

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