Financial Tools and Interest: Difference between revisions
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#It is forbidden to give a gift to someone on condition that they give you a small gift each year (or regularly) for an extended period of time such that the accumulation of the gifts is more than the original gift. Essentially an annuity using gifts is forbidden.<Ref>Pitchei Teshuva 160:5 writes that the Teshuva Mahava 1:54-58 has a series of teshuvot about whether it is forbidden to give a gift in order to get back a greater gift broken up over time. Originally he held it was only rabbinic ribbit but finally concluded it was ribbit. Sheilat Yavetz also writes that such a setup is ribbit. However, the Knesset Hagedola holds that it is permitted.</ref> | #It is forbidden to give a gift to someone on condition that they give you a small gift each year (or regularly) for an extended period of time such that the accumulation of the gifts is more than the original gift. Essentially an annuity using gifts is forbidden.<Ref>Pitchei Teshuva 160:5 writes that the Teshuva Mahava 1:54-58 has a series of teshuvot about whether it is forbidden to give a gift in order to get back a greater gift broken up over time. Originally he held it was only rabbinic ribbit but finally concluded it was ribbit. Sheilat Yavetz also writes that such a setup is ribbit. However, the Knesset Hagedola holds that it is permitted.</ref> | ||
==Selling a Loan== | ==Selling a Loan== | ||
# If someone is owed money he can sell it to someone else at a discount. He can even sell the loan to his borrower. It is forbidden for the lender selling the debt to take upon himself responsibility to pay for the loan if it goes unpaid by the borrower. However, it is permitted for the lender to take upon himself the responsibility to pay for the loan if it is found to be invalid or is collected by other creditors of the lender.<ref>Shulchan Aruch Y.D. 173:4</ref> | # If someone is owed money he can sell it to someone else at a discount. He can even sell the loan to his borrower. It is forbidden for the lender selling the debt to become a guarantor for the loan or take upon himself responsibility to pay for the loan if it goes unpaid by the borrower. However, it is permitted for the lender to take upon himself the responsibility to pay for the loan if it is found to be invalid or is collected by other creditors of the lender.<ref>Shulchan Aruch Y.D. 173:4, Brit Yehuda 15:1-3</ref> | ||
# For example, if someone owes a large loan to a communal institution and the institution needs money they can sell that loan to someone else for less than the full value.<ref>Shulchan Aruch Y.D. 173:5</ref> | # For example, if someone owes a large loan to a communal institution and the institution needs money they can sell that loan to someone else for less than the full value.<ref>Shulchan Aruch Y.D. 173:5</ref> | ||
#If someone owes a creditor money and hires someone else to pay the debt for him the borrower must pay the agent the amount due or money. He can't pay him less because the agent doesn't need to pay immediately. Doing so is taking interest. If one uses a language such as hiring an agent to release or save him from such a creditor then it is permitted since it is possible for the agent to appease the creditor with less than the amount due.<Ref>Rama Y.D. 173:4</ref> | #If someone owes a creditor money and hires someone else to pay the debt for him the borrower must pay the agent the amount due or money. He can't pay him less because the agent doesn't need to pay immediately. Doing so is taking interest. If one uses a language such as hiring an agent to release or save him from such a creditor then it is permitted since it is possible for the agent to appease the creditor with less than the amount due.<Ref>Rama Y.D. 173:4</ref> | ||
# The loan must be sold in a halachically binding manner with a kinyan. That is for an oral loan it can be sold with Maamid Shloshtan, in the presence of the buyer, seller, and borrower the transaction is declared to have taken place, and for a written loan it can be sold with writing another document and transferring that document to the buyer. After the fact if they didn't do a binding kinyan some say that it is nonetheless permitted.<ref>Brit Yehuda 15:2</ref> | |||
==Sources== | ==Sources== | ||
<references/> | <references/> | ||
[[Category:Ribbit]] | [[Category:Ribbit]] | ||
