Heter Iska: Difference between revisions
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<p class="indent">The Heter Iska splits the money in two, half (or a percentage) is a money deposit and half is a loan. The borrower may use the half which is a money deposit for business but as the deposit is considered the property of its owner wherever it may be, the profit that the borrower makes belongs to the lender. However, a loan is considered the money of the borrower and the profits belong to the borrower, who is then only obligated to return the capital without interest. </p> | <p class="indent">The Heter Iska splits the money in two, half (or a percentage) is a money deposit and half is a loan. The borrower may use the half which is a money deposit for business but as the deposit is considered the property of its owner wherever it may be, the profit that the borrower makes belongs to the lender. However, a loan is considered the money of the borrower and the profits belong to the borrower, who is then only obligated to return the capital without interest. </p> | ||
<p class="indent">One condition of the agreement is that the borrower isn’t trusted to say that he lost money unless he proves it with acceptable witnesses and he isn’t trusted to say that he didn’t profit unless he makes a Shevuah (biblical oath) that he didn’t profit. Another condition is that if the borrower pays the agreed amount (above the original capital) he doesn’t need to prove that he didn’t make any more money. Therefore, at the end of term, the receiver returns the half which is a loan (while keeping the profit made from that half) and returns the deposit along with the profit he made from that half up to the amount agreed upon (and if he didn’t profit that amount unless he proves it he must still pay the agreed upon amount, and if he profited more, he’s exempt from paying more). </p> | <p class="indent">One condition of the agreement is that the borrower isn’t trusted to say that he lost money unless he proves it with acceptable witnesses and he isn’t trusted to say that he didn’t profit unless he makes a Shevuah (biblical oath) that he didn’t profit. Another condition is that if the borrower pays the agreed amount (above the original capital) he doesn’t need to prove that he didn’t make any more money. Therefore, at the end of term, the receiver returns the half which is a loan (while keeping the profit made from that half) and returns the deposit along with the profit he made from that half up to the amount agreed upon (and if he didn’t profit that amount unless he proves it he must still pay the agreed upon amount, and if he profited more, he’s exempt from paying more). </p> | ||
<p class="indent">There are many other conditions and one must consult with a reliable orthodox rabbi regarding each situation and how to draw up a Heter Iska. <ref> Kitzur Shulchan Aruch 66:1-6. See Ribit Halacha LeMaseh chapter 20. One can see this [http://www.bethdin.org/docs/PDF15-Shtar_Iska.pdf shtar isko] on the website of the Beth Din of America. | <p class="indent">There are many other conditions and one must consult with a reliable orthodox rabbi regarding each situation and how to draw up a Heter Iska.<ref> Kitzur Shulchan Aruch 66:1-6. See Ribit Halacha LeMaseh chapter 20. One can see this [http://www.bethdin.org/docs/PDF15-Shtar_Iska.pdf shtar isko] on the website of the Beth Din of America. | ||
* Jewish Agent: According to Rashi (cited by Rama 160:16) that there’s no prohibition of ribbit when done through a shaliach perhaps that can permit using a bank loan since the teller is merely an agent of the bank. Bet Yosef 160:16 and Taz vehemently argue that this is completely forbidden and a ruse. Rather this citation of Rashi was made a mistaken student. Rama and Shach defend Rashi. | * Jewish Agent: According to Rashi (cited by Rama 160:16) that there’s no prohibition of ribbit when done through a shaliach perhaps that can permit using a bank loan since the teller is merely an agent of the bank. Bet Yosef 160:16 and Taz vehemently argue that this is completely forbidden and a ruse. Rather this citation of Rashi was made a mistaken student. Rama and Shach defend Rashi. | ||
* Non-Jewish Agent: Rabbenu Tam (cited by Tosfot 71b s.v. kgon) held it was permitted to lend with interest to a Jew using a non-Jewish agent since there's no concept of agency between a Jew and a non-Jew. Therefore, even though one Jew asked another Jew to get a loan with interest from another Jew it is permitted since the non-Jew is acting on his own. Most rishonim disagree with the Rabbenu Tam. | * Non-Jewish Agent: Rabbenu Tam (cited by Tosfot 71b s.v. kgon) held it was permitted to lend with interest to a Jew using a non-Jewish agent since there's no concept of agency between a Jew and a non-Jew. Therefore, even though one Jew asked another Jew to get a loan with interest from another Jew it is permitted since the non-Jew is acting on his own. Most rishonim disagree with the Rabbenu Tam. | ||
