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Interest with Non-Jews: Difference between revisions
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→Selling Debt
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#If a Jew borrowed from a non-Jew with a collateral and then the non-Jew for his own purposes borrowed from another Jew with the same collateral it is permitted for the second Jew to collect interest from the non-Jew, even if the non-Jew will in turn force the first Jew to pay interest.<ref>Tur 168:20 quotes the Baal Haitur that if a Jew borrowed from a non-Jew with a collateral and now the non-Jew is borrowing from another Jew with the same collateral the second Jew may not accept the interest from the non-Jew since it is as though it is coming from the Jew. However, the Rosh Pesachim 2:10 and Rashba 3:229 disagree. Once the Jew borrows from the non-Jew it is completely permitted and if the non-Jew then borrows from another Jew that is disconnected. The Bet Yosef 168:20 cites the Ran b”m 71b s.v. veharamban and Baal Hatrumot 46:4:10 who side with the Baal Haitur. Yet, the Baal Hatrumot adds that if the non-Jew accepts responsibility for the loan he’s taking from the second Jew it is permitted. Shulchan Aruch 168:20 cites the Rosh and Rashba as the main opinion and the Baal Haitur as some say.</ref> | #If a Jew borrowed from a non-Jew with a collateral and then the non-Jew for his own purposes borrowed from another Jew with the same collateral it is permitted for the second Jew to collect interest from the non-Jew, even if the non-Jew will in turn force the first Jew to pay interest.<ref>Tur 168:20 quotes the Baal Haitur that if a Jew borrowed from a non-Jew with a collateral and now the non-Jew is borrowing from another Jew with the same collateral the second Jew may not accept the interest from the non-Jew since it is as though it is coming from the Jew. However, the Rosh Pesachim 2:10 and Rashba 3:229 disagree. Once the Jew borrows from the non-Jew it is completely permitted and if the non-Jew then borrows from another Jew that is disconnected. The Bet Yosef 168:20 cites the Ran b”m 71b s.v. veharamban and Baal Hatrumot 46:4:10 who side with the Baal Haitur. Yet, the Baal Hatrumot adds that if the non-Jew accepts responsibility for the loan he’s taking from the second Jew it is permitted. Shulchan Aruch 168:20 cites the Rosh and Rashba as the main opinion and the Baal Haitur as some say.</ref> | ||
== | ==Buying Debt== | ||
===Non-Jew Selling Jew's Debt=== | ===Non-Jew Selling Jew's Debt=== | ||
#A Jew may not buy debt if the borrower is Jewish and lender is non-Jewish. If he does so it is like the Jewish purchaser is the new lender to the Jewish borrower and may not collect any interest that did not yet accrue from the Jew from the time of the purchase.<ref>Rashba (responsa 1:764 cited by Darkei Moshe 168:6, Bedek Habayit 168:27) writes that a Jew may buy a debt of a Jew to a non-Jew from a non-Jew. Nonetheless, the Jew may not directly collect the interest from the Jew because of the gravity of the sin of interest. Rather, if the non-Jew collects the interest and then turns it to over to the Jewish buyer it is permitted. This is codified by Rama 168:10 and Knesset Hagedola (Bet Yosef 168:44). While this is the simple interpretation of Rashba's words, the commentaries of Shulchan Aruch explain Rashba differently. Taz argues that obviously a Jew may not buy debt of another Jew and collect interest. Once he buys the debt off of the non-Jewish lender it is like he's the lender. In that case he may not collect any interest that did not yet accrue while the loan was in the property of the non-Jew. Taz therefore explains that the case of Rashba is not where there is actually a sale. Rather, the Jewish purchaser gave money to the non-Jew and the non-Jew ensured him that he would receive profits from the loan. However, since the loan was not actually transferred and the non-Jew could back out of the deal and just repay the Jewish purchaser's money, the Jewish purchaser may collect the interest. However, because of the gravity of the sin of interest Rashba does not allow the purchaser to take the interest directly from the Jewish borrower but only from the non-Jew. If the non-Jew collects and hands it over to the purchaser that is permissible. However, if there is actually a sale of the debt it is forbidden to collect any interest that did not accrue to the non-Jew while the debt was in his property. Shach (Nekudat Hakesef 168:10) agrees fundamentally to Taz that a complete sale would be forbidden but explains that the case is where the sale was valid in secular law and not in halacha. In such a case the non-Jew would be obligated to his law system to give the money received from the loan to the purchaser, but according to halacha it isn't formally a sale. However, Chelkat Binyamin (Biurim 168:10 s.v. v'h'akum) notes that Shach's position is difficult. According to Rama C.M. 66:25 a sale with a non-Jew that is valid in secular law is also valid according to halacha. Therefore, Chelkat Binyamin 168:91, Laws of Ribbis p. 317, and Horah Brurah 168:54 accept the view of Taz. </ref> | #A Jew may not buy debt if the borrower is Jewish and lender is non-Jewish. If he does so it is like the Jewish purchaser is the new lender to the Jewish borrower and may not collect any interest that did not yet accrue from the Jew from the time of the purchase.<ref>Rashba (responsa 1:764 cited by Darkei Moshe 168:6, Bedek Habayit 168:27) writes that a Jew may buy a debt of a Jew to a non-Jew from a non-Jew. Nonetheless, the Jew may not directly collect the interest from the Jew because of the gravity of the sin of interest. Rather, if the non-Jew collects the interest and then turns it to over to the Jewish buyer it is permitted. This is codified by Rama 168:10 and Knesset Hagedola (Bet Yosef 168:44). While this is the simple interpretation of Rashba's words, the commentaries of Shulchan Aruch explain Rashba differently. Taz argues that obviously a Jew may not buy debt of another Jew and collect interest. Once he buys the debt off of the non-Jewish lender it is like he's the lender. In that case he may not collect any interest that did not yet accrue while the loan was in the property of the non-Jew. Taz therefore explains that the case of Rashba is not where there is actually a sale. Rather, the Jewish purchaser gave money to the non-Jew and the non-Jew ensured him that he would receive profits from the loan. However, since the loan was not actually transferred and the non-Jew could back out of the deal and just repay the Jewish purchaser's money, the Jewish purchaser may collect the interest. However, because of the gravity of the sin of interest Rashba does not allow the purchaser to take the interest directly from the Jewish borrower but only from the non-Jew. If the non-Jew collects and hands it over to the purchaser that is permissible. However, if there is actually a sale of the debt it is forbidden to collect any interest that did not accrue to the non-Jew while the debt was in his property. Shach (Nekudat Hakesef 168:10) agrees fundamentally to Taz that a complete sale would be forbidden but explains that the case is where the sale was valid in secular law and not in halacha. In such a case the non-Jew would be obligated to his law system to give the money received from the loan to the purchaser, but according to halacha it isn't formally a sale. However, Chelkat Binyamin (Biurim 168:10 s.v. v'h'akum) notes that Shach's position is difficult. According to Rama C.M. 66:25 a sale with a non-Jew that is valid in secular law is also valid according to halacha. Therefore, Chelkat Binyamin 168:91, Laws of Ribbis p. 317, and Horah Brurah 168:54 accept the view of Taz. </ref> | ||
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===Jew Selling Non-Jew's Debt=== | ===Jew Selling Non-Jew's Debt=== | ||
#If a non-Jew borrowed money from a Jew with interest, the Jew can sell that loan to another Jew. | #If a non-Jew borrowed money from a Jew with interest, theoretically the Jew can sell that loan to another Jew. Doing so will make the Jewish buyer like the new lender and he can collect the interest from the non-Jew. However, this has to be a complete sale of the loan and they will no longer have any claims upon each other.<ref>Shulchan Aruch Y.D. 168:18 explains that the Jew can sell the collateral to another Jew with halachic means of acquisition. When there is no collateral and it is impossible to effectively sell the debt, Shulchan Aruch writes that the debt is transferred by having the Jewish lender forgive the non-Jew of his debt. See further for details.</ref> Practically, for this to be effective a binding ''kinyan'' (acquisition) is necessary to transfer the non-Jew's debt to the Jewish purchaser. | ||
##Some ''poskim'' hold that this sale can be effectuated by a mechanism that local businessman accept as a binding acquisition (''kinyan situmta'') and is enforceable by secular law.<ref>Laws of Ribbis p. 255 writes that one may rely on the opinion of Ben Ish Chai (V'etchanan 23) that a non-Jew's debt can be sold with a ''kinyan situmta''. </ref> | ##Some ''poskim'' hold that this sale can be effectuated by a mechanism that local businessman accept as a binding acquisition (''kinyan situmta'') and is enforceable by secular law.<ref>Laws of Ribbis p. 255 writes that one may rely on the opinion of Ben Ish Chai (V'etchanan 23) that a non-Jew's debt can be sold with a ''kinyan situmta''. </ref> | ||
##If there is a loan document, according to many ''poskim'' the debt can be halachically sold by giving over the loan document and writing a new document for this sale.<ref>Gilyon Maharsha to 168:18, Brit Yehuda 33:24. However, this is unlike the Shach 168:61 and Shulchan Aruch Harav (69) who hold that it is impossible to sell the debt of a non-Jew even when there is a loan document.</ref> | ##If there is a loan document, according to many ''poskim'' the debt can be halachically sold by giving over the loan document and writing a new document for this sale.<ref>Gilyon Maharsha to 168:18, Brit Yehuda 33:24. However, this is unlike the Shach 168:61 and Shulchan Aruch Harav (69) who hold that it is impossible to sell the debt of a non-Jew even when there is a loan document.</ref> | ||
##When there is a moveable collateral from the non-Jew | ##According to some poskim the above solutions are ineffective and even for the above poskim in a case where there is no loan document and no method accepted by local businessman. Accordingly, it is impossible to transfer the debt between the two Jews. However, there are other solutions for how to accomplish the same result as selling the debt. | ||
##If the loan between the Jew and the non-Jew was oral and without any collateral or loan document the loan cannot be transferred from the first Jew and the second Jew. Therefore, it is necessary to resort another method of transferring the debt. This debt involves the first Jew forgiving the non-Jew completely and the second Jew collecting from the non-Jew that which he's owed.<ref>Shulchan Aruch Y.D. 168:18, Brit Yehuda 33:23</ref> | ##When there is a moveable collateral from the non-Jew it is possible to sell the collateral and not the actual debt. The collateral is simple to make an acquisition upon; it is just physically transferred to the second Jew with the stipulation that it is a complete sale and they have no claims upon each other.<ref>Shulchan Aruch Y.D. 168:18, Brit Yehuda 33:15</ref> According to Ashkenazim, it isn't necessary to make a clear stipulation that it is a complete sale since it is assumed that this is the agreement.<ref>Rama 168:18 following the Mordechai and Rosh teshuva</ref> The purchasing Jew makes a ''[[Acquisition|kinyan]]'' on the collateral by taking the actual collateral item.<ref>Rama 168:18</ref> If the Jewish purchaser pays money to buy the collateral but does not actually take the collateral whether he acquired the collateral for purposes of collecting interest is subject to debate.<ref>Bet Yosef and Rama 168:18 hold that it is acceptable to use kinyan kesef to purchase the mashkon of a goy from another Jew since from the Torah a kinyan kesef is effective. However, Gra 168:62 disagrees with this suggestion. He holds that fundamentally the rabbis invalidated the acquisition of kinyan kesef (Tosfot Avoda Zara 63a s.v. vha). Also, even if it is a kinyan on a Torah level and not midrabbanan it would be forbidden to use this kinyan to collect interest as the rabbis introduced stringencies in the world of interest and not leniencies. Chelkat Binyamin 168:215 writes that a person should not rely on this initially but after the fact one may rely upon it. </ref> | ||
##If the loan between the Jew and the non-Jew was oral and without any collateral or loan document the loan cannot be transferred from the first Jew and the second Jew. Therefore, it is necessary to resort another method of transferring the debt. This debt involves the first Jew forgiving the non-Jew completely and the second Jew collecting from the non-Jew that which he's owed.<ref>Shulchan Aruch Y.D. 168:18, Brit Yehuda 33:23. Shach 168:62 explains that the mechanism isn't exactly a sale since one can't really sell a non-Jew's debt to another Jew. Rather, one is forgiving the non-Jew from paying him back. Then, the non-Jew can pay the second Jew as he is "considered" according to their intention to be the new lender. In Shach 168:63, he clarifies that he doesn't need to inform the non-Jew of that which he forgave. In practice the non-Jew will pay the second Jew because he seems to have bought the debt. It isn't considered as though the non-Jew is paying interest to the second Jew on behalf of the first Jew because once the first Jew exempted the non-Jew nothing needs to be paid on his behalf. If it is paid to the second Jew that's from the initiative of the non-Jew and not for the first Jew. Netivot Shalom 168:18:9 explains that even though the non-Jew will be paying the second Jew in error, the second Jew may collect it. Shach 168:63 is in disagreement with the Bach who thinks that it is necessary to alert the non-Jew of this forgiving mechanism. Chavot Daat 168:41 endorses another approach. He explains that this transaction is absolutely a sale in secular law and so the non-Jew can treat it as a sale. However, halacha does not recognize the sale and so it is considered forgiving a loan with respect to Jews. Therefore, he concludes that the first Jew may not go and reacquire the loan from the non-Jew once he forgave it, which is binding in secular law. Seemingly, this is contradicted by Rama C.M. 66:25 who writes that a sale that in effective in secular law with a non-Jew is also effective in halacha when it effectuates a sale between a Jew and non-Jew. However, Chavot Daat might explain that this means that this is effective in secular law and Jews must follow this as well. Yet, since it is not objectively a sale in halacha it cannot solve an interest issue and it is necessary to resort to the solution of forgiving the loan.</ref> | |||
#A Jew who lent to a non-Jew with interest can sell the non-Jew's debt from a certain date going forward. The first Jew would collect the interest until that date and the second Jew would collect from that date and on.<ref>Tur and Shulchan Aruch Y.D. 168:18</ref> | #A Jew who lent to a non-Jew with interest can sell the non-Jew's debt from a certain date going forward. The first Jew would collect the interest until that date and the second Jew would collect from that date and on.<ref>Tur and Shulchan Aruch Y.D. 168:18</ref> | ||
#The Jew can resell the non-Jew's debt for a lower interest rate than the non-Jew is giving him. For example, a Jew who lent a non-Jew $100 for 10% a year may then resell that debt to another Jew for 5% a year.<ref>Rama 168:18, Chelkat Binyamin 168:204</ref> | #The Jew can resell the non-Jew's debt for a lower interest rate than the non-Jew is giving him. For example, a Jew who lent a non-Jew $100 for 10% a year may then resell that debt to another Jew for 5% a year.<ref>Rama 168:18, Chelkat Binyamin 168:204</ref> | ||
