The Laws of Loans

Sefer HaMitzvos (positive commandment 197) and Sefer HaChinuch (mitzvah 66) include this as one of the 613 mitzvos of the Torah.

A blessing is not recited over the performance of this mitzvah, since the intended recipient will possibly refuse the loan (Rashba, Vol. I, Responsum 18; see also Tumim 97:1 which offers a different explanation).

An exclusion is also implied: There is no mitzvah to offer an interest-free loan to a gentile. See also Hilchos Metziah U’Fikadon, subsection 39, and notes (p. 210 below).

Both Rav Yosef Caro, in his Shulchan Aruch (Yoreh Deah 249:1), and Rama (op. cit. 250:1) mention the concept of “financial capacity” in relation to giving tzedakah. Neither source, however, defines that term. Now with regard to tzedakah, there is a ceiling stated: one may give up to a fifth of his worth as tzedakah. No such ceiling, however, is mentioned with regard to lending. On one hand, one could argue that since one expects the loan to be repaid, it would be appropriate to lend a larger portion of his resources. On the other hand, it does not seem logical to obligate a person to lend so much that he has insufficient resources remaining for investment. See Ahavas Chesed (1, 4) where this issue is discussed. See also footnote 25 below.

Although the Alter Rebbe mentions Hilchos Tzedakah (“The Laws of Charity”) in a number of places in his Shulchan Aruch, the text is presently not extant. It is unknown whether it was written, but destroyed by fire as were other portions of the Alter Rebbe’s Shulchan Aruch, or merely conceived abstractly, but never actually composed. See the Overview to Vol. 1 of the present Bilingual Edition of the Alter Rebbe’s Shulchan Aruch, pp. xxviii-xliv.

Shmos 22:24.

Imrei Yaakov cites several authorities who mention that utensils should also be lent as part of the mitzvah of tzedakah.

For the above prooftext begins “If,” seemingly, leaving the matter to the person’s choice.

Devarim 15:8; this additional charge emphasizes that we are commanded to do so. The verse from Devarim uses the term haavet which implies a loan given in return for security. Hence, the Alter Rebbe proceeds to clarify that the mitzvah applies even if no security is given.

Mechilta to the verse from Shmos cited above.

I.e., a loan that might not be returned.

Devarim 15:10.

Ibid.:9.

When loans are required to be remitted, as stated in the prooftext. See also subsection 34.

See subsection 38.

For it is the loans that are not backed by security that are the subject of that verse.

It must, however, be emphasized that the lender should take measures to secure the money he lends out — i.e., having the loan recorded in a promissory note, observed by witnesses, or the like. See subsection 6.

Which, as stated above, implies that security is being given in return for the loan.

I.e., gifts of charity.

That the debt will not be left unpaid.

Bava Metzia 31b; Kesubos 67b.

I.e., the rich man is not required to sell his possessions if he is in temporary financial straits, because of a lack of cash flow. Instead, he should be offered a loan, for he is needy at that time.

Imrei Yaakov explains that the wording of the Tur (which the Alter Rebbe is quoting) emphasizes that the obligation is only to give a loan for a short amount of time. If one asks for a loan for an extended period, there is no obligation to grant it. Instead, the prospective borrower should sell some of his assets to raise the money he needs rather than borrow from others.

I.e., a general category including all Jews, the rich as well as the poor.

Bava Metzia 71a.

Cf. Devarim 15:8. Kesubos 67b infers from the Hebrew phrase employed that the mitzvah of giving charity involves giving a person not merely enough to satisfy his basic necessities, but also enough to enable him to maintain his previous standard of living. The Alter Rebbe is stating that this concept also applies to the mitzvah of lending.

Some authorities (Megillas Esther, Shoresh 6; P’nei Yehoshua, Bava Metzia 71a) maintain that this applies even if this will cost the lender a substantial loss of profit, provided that his financial capacity will not be reduced significantly. Other authorities, however, maintain that if the lender/investor stands to benefit substantially, he is not obligated to forfeit that gain in order to lend money to a fellow Jew (Shaar Mishpat 97:1). Imrei Yaakov postulates that if the lender/investor’s livelihood depends on making loans and investments, he is certainly not bound to forego an opportunity for profit in order to give an interest-free loan to a fellow Jew. Ahavas Chesed (2:3; 5:3; 6:9) writes that even a person who derives his livelihood from lending must give an interest free loan if approached by a Jewish borrower who needs money to buy his basic necessities. Indeed, giving such a loan takes precedence over the lender’s desire to generate additional income to provide for a more lavish lifestyle.

Ahavas Chesed 1:12 does not, however, require a person to sell off his existing investments so that he will have resources to lend. He does, nevertheless, suggest that one is obligated to withdraw from his savings for that purpose, provided the amount of the loan is within his means.

Mechilta, loc. cit.

The word karov is usually translated as “relative.” Nevertheless, the literal translation “close” is also appropriate, for it includes friends and neighbors. Ahavas Chesed (6:2) writes that one’s relatives are given first priority. Afterwards, neighbors should be given priority over more distant townsmen.

As mentioned, this portion of the Alter Rebbe’s Shulchan Aruch is not extant. In the Shulchan Aruch of Rav Yosef Caro, this concept is found in Yoreh Deah 251:3.

Shabbos 63a.

See Rambam, Mishneh Torah, Hilchos Matnos Aniyim 10:7: “The highest level beyond which there is none is a person who supports a Jew who has fallen into poverty [by] giving him a present or a loan, entering into partnership with him, or finding him work so that his hand will be fortified and he will not have to ask others [for alms]. Concerning this, it is written (Vayikra 25:35): ‘You shall support him, the stranger, the resident, and he shall live among you.’ Implied is that you should support him before he falls and becomes needy.”

Imrei Yaakov cites K’nesses HaGedolah (Yoreh Deah, sec. 160, Hagahos HaTur 3) which states that the prooftext is being exact in its use of the term “poor person.” The Scriptural prohibition does not apply to a rich man who has resources, but no cash at hand (see also subsection 13). Nevertheless, even in such an instance, there is a Rabbinic prohibition, forbidding his creditor from pressing him for cash that he does not have.

Note, however, the Yereim (mitzvah 183) who writes that the prooftext refers to a “poor person” only because Scripture refers to the most common circumstances and a borrower is most often poor. For a rich person in need, (i.e., one with cash-flow problems) is considered “poor” at that time and one may not press him to return a debt. Nevertheless, it would seem that such a situation should not be left to continue indefinitely. A payment schedule should be established, enabling the borrower to liquidate sufficient assets without suffering undue loss.

In all instances, if the lender suspects that the borrower possesses resources with which he could repay the debt, instead of pressing him for repayment himself, he may appeal to the court which, after verifying his claim, will assess the borrower’s property and expropriate everything but the borrower’s basic necessities, as explained in subsectionion 5ff.

The Minchas Chinuch (mitzvah 67) questions whether the prohibition applies only when one has definite knowledge that the borrower lacks the money or whether it applies even when there is a reasonable likelihood — but no certainty — of such. Kesef HaKodoshim maintains that this prohibition applies only when one has good reason to assume that the borrower does not have the money. If, however, one is merely in doubt, one may press for repayment. See also subsectionion 13.

Both Sefer HaMitzvos (negative commandment 234) and Sefer HaChinuch (mitzvah 67) include this as one of the 613 mitzvos of the Torah.

Shmos 22:24.

Devarim 15:3, where the verb may be translated as “you shall press” or “you may press.”

Sefer HaMitzvos (positive commandment 142) and Sefer HaChinuch (mitzvah 476) include this as one of the 613 mitzvos of the Torah. Nevertheless, the Alter Rebbe begins this subject with the qualification “there are authorities,” because Ramban (Hasagos LeSefer HaMitzvos, Shoresh 6) differs and maintains that there is no mitzvah in pressing a gentile for repayment.

Bava Metzia 75b.

Imrei Yaakov questions whether one is obligated to avoid the borrower if one does not intend to pressure him by appearing before him, but rather encounters him as a matter of course. See Aruch HaShulchan 97:2, where the concept is discussed.

With the words “alluded to,” the Alter Rebbe is implying that this stringency is not included in the scope of the Biblical prohibition, but rather is Rabbinical in origin and was associated with the verse by our Sages (Imrei Yaakov, based on Lechem Mishneh, Hilchos Malveh VeLoveh 1:2).

Mishlei 3:28, as quoted and interpreted in Bava Metzia 110b-111a. See also Hilchos She’ilah U’Sechirus, subsection 14, p. 369).

The Alter Rebbe’s ruling is based on Rambam, Hilchos Malveh VeLoveh 1:3; Tur and Shulchan Aruch, Choshen Mishpat 97:4. To the wording of those sources, the Alter Rebbe adds the words eisek parnasaso, translated as “his commercial endeavors.” The addition appears to imply that a person should only take a loan for a commercial endeavor. The rationale is that the borrower thinks that his investment will realize a profit, thereby enabling him to repay the lender. Obviously, there is a risk involved, but he and the lender assume that he will not suffer a loss. (Needless to say, for that reason, a loan should not be taken for a highly speculative investment). If, however, the borrower does not use the loan for his business endeavors, but spends it on other matters, e.g., his household expenses, he will have no foreseeable means of paying back the debt.

This presents an obvious difficulty for, in practice, in both present and past generations, loans are and were often taken to meet a borrower’s immediate household needs. Indeed, the passage from Devarim, ch. 15, and its treatment in Rabbinic literature (including subsection 1 above; see also the Alter Rebbe’s Shulchan Aruch Orach Chayim, sec. 242:3ff) imply that one should extend a loan for that very purpose. In resolution, it can be explained that the problem the Alter Rebbe highlights here applies only when the borrower does not give the lender legal redress to collect his due. If, however, he provides him with means to collect payment, e.g., security or a contract of loan, there is no difficulty.

Moreover, it could be said that when a person has a regular source of income, if he is borrowing for a specific purpose, e.g., funding the wedding of a child, he can be considered as borrowing for a business endeavor. The rationale is that if he could not borrow these funds, he would have to stop pursuing his regular occupation and seek the money he needs elsewhere. Thus the loan actually enables him to continue his business endeavors (Bris Yehudah, ch. 38, note 18, quoting the responsa Sho’el U’Meishiv, Mahadura Kama, Vol. 3, sec. 160, regarding a heter iska).

See also Pischei Choshen, ch. 2, note 26, which rules that if the lender is made aware of the purpose of the loan, it is permissible to take it, even if the money will be used for a purpose that eats into the principal.

And thus it could be assumed that the lender would be prepared to give the borrower the money as an act of charity.

Tehillim 37:21.

Sefer Meiras Einayim 97:29 suggests that this concept is derived from the verse (Vayikra 25:55): “The children of Israel are servants unto Me,” i.e., they are G‑d’s servants and not the servants of servants (meaning other mortals). Hence, they cannot be compelled to work for anyone else. See a parallel in Bava Metz ­ia 10a.

Imrei Yaakov suggests that the Alter Rebbe may be implying that if the borrower had an investment plan which he thought would enable him to earn the money to pay the debt, but his venture did not succeed, he is not required to take a job as a worker to pay the debt. If, however, a person took the loan without having a source to repay it, he is obligated to take a job to earn the money to pay his creditor.

Bava Metzia 45a. Implied is that the borrower has a moral obligation to repay the debt, but the lender cannot compel him to engage in any activities that he would not engage in otherwise so that he could repay the debt.

E.g., his wages, other earnings, money given him as a gift or as an inheritance, or debts that were owed to him and were repaid.

I.e., the court enables the debt to be settled by expropriating the property — both land and movable property — belonging to the debtor. Nevertheless, he is allowed to keep a minimal amount of food, clothing, household utensils and tools for work. See Rambam (Mishneh Torah, Hilchos Malveh VeLoveh 1:7), based on Arachin 6:3.

Or the money to purchase these necessities.

See Arachin 23b. See also subsection 8 below.

And likewise his young children (Shulchan Aruch, Even HaEzer, sec. 71).

I.e., among the obligations a husband incurs through marriage are providing his wife with food and clothing (Shmos 21:10; Rambam, Mishneh Torah, Hilchos Ishus 12:2). Similarly, every father (whether married to the mother of his children or not) is required to pay for his young children’s food and clothing (loc. cit.:14-15). Nevertheless, as explained in Sefer Meiras Einayim 97:51, 57, a man is obligated to support his wife and children only when he has the means and, in this instance, he does not. His property belongs to the lender. As an act of charity, the lender has the obligation to leave the borrower his basic necessities, but that obligation does not extend to his wife and children.

Since the person giving the present gave it with the specific intent that it not be used to repay the debt, it never came under lien to the lender. Indeed, if he uses it to pay the lender, the present is nullified — for the money was used contrary to the giver’s wishes — and the lender is obligated to return it to the giver (Tur, Choshen Mishpat 111).

I.e., even though he was accustomed to dressing more lavishly or less lavishly than the norm, the allotment is made according to the norm.

In such an instance, everything except that particular item may be expropriated.

See Arachin 24a.

The Alter Rebbe’s wording seems to imply that Shabbos garments that a man gave to his wife and children should be expropriated to pay his debts. The rationale is that since these garments are of great value, we assume that the husband or father never gave them to his wife or children as outright gifts. Instead, in the back of his mind, he always retained the thought that if he became pressed financially, he would reclaim these articles and sell them (Sefer Meiras Einayim 97:61). The Alter Rebbe’s ruling reflects that of Rav Yosef Caro’s Shulchan Aruch (Choshen Mishpat 97:26). In his gloss to that text, Rama mentions a conflicting opinion which maintains that a woman's Sabbath clothing is considered her private property and, hence, is not on lien to her husband's debts.

It is reasonable to assume that this ruling is based on socio-economic factors and if they change, the ruling also would be altered. Today, when women enjoy far greater financial independence, it is more likely to consider that such gifts are given unconditionally.

All authorities agree that these articles are considered as outright gifts to the man’s wife or children and are not his property. Hence, they are not under lien to his loans.

Aruch HaShulchan 70:1 notes that in his time, many were not careful with regard to this prohibition and would offer loans without witnesses being present. He justifies that practice, explaining that the loans are being given to trustworthy people who are well known to the lenders. Hence, there is no need for concern (see also Encyclopedia Talmudis, Vol. 9, p. 220, footnote 75). It has been noted, however, that the source for the requirement for witnesses derives from a passage in Bava Metzia 75b which relates that Ravina refused to lend money to Rav Ashi unless witnesses were present. Now Rav Ashi was certainly trustworthy and Ravina was familiar with his character and yet he refused to give him the loan without witnesses (Imrei Yaakov).

Who can be assumed to be righteous.

Bava Metzia 75b mentions this possibility when relating the incident concerning Ravina and Rav Ashi mentioned in footnote 58.

Vayikra 19:14. Our Sages interpret this charge as a prohibition against harming those who are spiritually unaware; see Rambam, Mishneh Torah, Hilchos Rotzeiach 12:14. Similarly, in this instance, by lending money without a record, the lender is inviting, so to speak, the borrower to deny the debt, as it were.

For in this instance, the security will prevent the borrower from reneging on the debt.

As stated in subsection 14 below, this prohibition applies only to a loan, but not for any other type of debt — e.g., the fee for one’s animal or his utensils which the debtor hired, the rental of his home, wages for work performed , or payment for articles that were stolen or robbed, provided these obligations have not yet been considered as loans, as explained there.

Although the passage from Devarim 15:8 that serves as a source for this prohibition speaks of a poor man, the Sifri interprets it as referring to a rich person as well.

Needless to say, he is forbidden to do so before the time for payment arrives.

Bava Metzia 113a.

Implied is that there is no prohibition if the borrower invites the lender to his home to take the security (Imrei Yaakov; see Tumim 97:4).

In his Kuntreis Acharon, (note 1,) the Alter Rebbe cites Bedek HaBayis who notes that although it is forbidden to take security from a widow (see subsectionion 10), it is permitted to do so if she gives it at the time of the loan (see subsection 15). He thus concludes that if she offers the security willingly, it is permitted to take it even after the loan was given (see subsection 11).

On this basis, the Alter Rebbe explains a further point. The scope of the prohibition against the lender entering the borrower’s home to take security is less encompassing than that of the prohibition against taking security from a widow, as evidenced by the fact that one may enter a guarantor’s home to take security (see subsection 14). Thus we can infer that if a borrower willingly invites a lender to enter his home and take security, he is permitted to do so.

Sefer HaMitzvos (negative commandment 239) and Sefer HaChinuch (mitzvah 585) include this as one of the 613 mitzvos of the Torah.

Devarim 24:10.

Although the prooftext speaks of entering the borrower’s home, taking anything from him by force is equivalent to entering his home. See Sefer Meiras Einayim 97:7.

Devarim 24:11.

The court’s agent may even use physical force to compel him to give security (Sefer Meiras Ei ­nayim 97:9).

Bava Metzia 113a. I.e., if the lender demanded payment of his loan and the court issued an order entitling the lender to collect his due, the agent of the court may enter the borrower’s home and seize property by force for that purpose (see the end of subsection 13). Nevertheless, until the lender appeals to the court and the court accedes to his request, the agent of the court is not authorized to seize property on behalf of the lender.

Ibid. 113b. See also footnote 47 above.

See subsection 5.

Bava Metzia, 113a. As the Alter Rebbe states in subsection 15, the obligation to return the security applies only with regard to security willingly given after the loan was made. If, however, the security was provided when the loan was given, the lender is not obligated to return it unless the debt is settled.

Devarim 24:13, as cited by Bava Metzia 114b.

Shmos 22:25.

In subsection 12, the Alter Rebbe addresses the obvious question: If one must return the security in the above manner, what value is there in taking it?

I.e., he willingly gave it as security after the loan was made, as mentioned in footnote 76 above.

Sefer HaMitzvos (positive commandment 199) and Sefer HaChinuch (mitzvah 587) include this as one of the 613 mitzvos of the Torah.

Some authorities maintain that security given willingly is not subject to the Scriptural obligation to return it when needed. The Alter Rebbe, however, follows the position of the Shulchan Aruch (Choshen Mishpat 97:16) which maintains that the mitzvah applies in this instance as well.

Bava Metzia 113a, b.

Ibid. 115a. Sefer HaMitzvos (negative commandment 242) and Sefer HaChinuch (mitzvah 583) include this as one of the 613 mitzvos of the Torah.

Devarim 24:6.

The mention of both millstones teaches that one is liable even when he takes only one millstone, because both are necessary for the mill to be used. Similarly, whenever two utensils are necessary for a given purpose, neither may be taken (Rambam, Mishneh Torah, Hilchos Malveh VeLoveh 3:3).

Possibly, the Alter Rebbe adds the words “any at all” to negate the opinion of the Shiltei Giborim who interprets the prooftext literally and forbids taking as security only a widow’s garments or bedding.

Bava Metzia 9:6. In his Commentary to the Mishnah, Rambam explains that this prohibition is a curb against immorality or gossip about such conduct. If a woman’s property is taken as collateral, she will not be comfortable with leaving it in another person’s domain and will seek out the person who took it. We fear that they will enter into improper relationships or that people will suspect them of such. Others maintain that the rationale is that a widow’s heart is broken and the Torah sought to refrain from causing her even the slightest anguish. Sefer Meiras Einayim 97:22 explains that a widow is usually incapable of defending herself in court against the claims of a creditor. On this basis, he extends this prohibition to a divorcee as well.

Devarim 24:17. Sefer HaMitz ­vos (negative commandment 241) and Sefer HaChinuch (mitzvah 591) include this as one of the 613 mitzvos of the Torah. See the conclusion of subsection 12.

As mentioned above (footnote 67), if the widow provides the security when the loan is given, there is no difficulty.

Even if he does not give it at the time of the loan.

I.e., according to law, one may pay a debt with movable property instead of cash. The lender, however, does not desire this option and is willing to wait until the borrower can pay cash. Nevertheless, he desires to take the movable property as security to be assured that he will receive his money.

Thus possession of the security may also lead to a practical benefit besides inspiring confidence in the loan’s eventual repayment.

The Talmud (Bava Metzia 115a) and the Shulchan Aruch (Choshen Mishpat 97:15) mention two other positive dimensions in having security even though it must be returned: a) the debt will not be remitted in the Sabbatical year (see subsection 38) and b) if the borrower dies, the security may be kept by the lender and does not become the property of the borrower’s children.

See subsection 22, p. 24; Hilchos Gezeilah, subsection 4, p. 250. Doing so also infringes upon the prohibition against taking interest (Shulchan Aruch, Choshen Mishpat 72:1).

I.e., the prohibition against taking her garment stated in subsection 10 applies only when it was taken as security.

Kesubos 86a-b. It is, however, the agent of the court who may apply these coercive measures, not the lender himself (Shulchan Aruch, Choshen Mishpat 97:15). Rama also mentions the possibility of imprisoning the borrower as a means of coercing him to pay.

As stated in subsection 7.

I.e., he will seek additional opportunities to earn money.

See subsection 7.

I.e., the restrictions enumerated in subsecs. 7-13.

Bava Metzia 115a.

See subsection 39.

Devarim 24:10. The verse concludes: “You shall not enter his home to collect security.”

Bava Metzia, loc. cit.

This term denotes a guarantor who makes a more encompassing commitment than an ordinary guarantor. Rambam, Mishneh Torah, Hilchos Malveh VeLoveh 25:5 states:

Who is considered to be an [ordinary] guarantor and who is considered a kablan? If a person says: “Give him [the loan] and I will give you [payment],” he is considered to be a kablan. The lender has the option of seeking repayment from him, even though he did not explicitly stipulate: “On the condition that I can collect the debt from whomever I desire first.”

If, however, he tells him: “Lend him and I will act as a guarantor,” “Lend him and I will pay,” “Lend him and I am obligated”... these statements cause him to be considered as an [ordinary] guarantor. [The lender] may not demand payment from him first, nor may he collect payment from him in a situation in which the borrower possesses property unless he makes a stipulation [to that effect].

Bava Metzia 114b.

At the end of the 30 days from when the loan fell due, the lender is not required to notify the borrower that he is going to sell his security. Instead, he may sell it at his own convenience.

I.e., the lender may be willing to extend the loan and hence does not require payment immediately. However, he asks for security to insure that he will ultimately be paid.

There is a further advantage in taking security. If the lender demands payment, the borrower can give him any goods, even items of inferior quality, which he will have to sell to raise cash. If, however, he extends the term of the loan and takes security, there is reason to hope that the borrower will repay him in cash.

Ibid. 113a.

I.e., it is not an article that he uses.

He may sell it immediately, as evident from subsection 17.

See footnote 47 above with regard to the standard allocation made for a debtor.

With this parenthetical statement, the Alter Rebbe explains why the lender is allowed to sell clothing that the borrower needs, although in subsection 5, he states that a debtor is allotted twelve months’ worth of clothing. The debtor is permitted to keep only ordinary clothing. More expensive garments must be sold and the difference between their value and the value of ordinary garments is to be used to satisfy the debt.

In his Kuntreis Acharon, (note 2,) the Alter Rebbe cites the source for this view as the gloss of Rama to the Tur, Darchei Moshe (Choshen Mishpat 73:8). There the Rama states that this view is accepted by all authorities. The expression “all authorities” refers, however, to the two opinions in the Mordechai (Bava Metzia, sec: 401-402), i.e. Riva and R. Kalonymos. Nevertheless, many other Rishonim do not accept their view and instead, maintain that the objection to the sale of these articles stems from the Torah’s command to return security when the borrower needs it. Hence, when that command does not apply — i.e., to security given at the time of the loan — there is no objection to selling the article. This view is reflected in the first position cited in this subsection. To reinforce his point that the “unanimity” in the Darchei Moshe refers only to the two minority positions cited above, the Alter Rebbe notes that in his gloss to the Shulchan Aruch (Choshen Mishpat 73:12), Rama does not make any note of the more stringent position.

See subsection 7.

See subsection 15.

By repaying the loan.

This term translates the Hebrew baal nefesh, literally, “master of soul,” cf. Mishlei 23:2.

See subsection 12.

See Makkos 3b.

By preserving his property, he is doing a favor for the borrower.

Bava Metzia 113a. See also Hilchos Metziah U’Fikadon, subsection 22 below.

The term “fit to render judgment,” refers to a court in which there is at least one scholar who is knowledgeable in Torah Law. The Shulchan Aruch of R. Yosef Caro (Choshen Mishpat 73:15) rules more leniently, stating that three unlearned individuals suffice. The stringency required by the Alter Rebbe is based on the rulings of Sifsei Kohen 73:40. The core of the difference between these positions is the extent the lender is considered to have acquired the security previously. According to the lenient view, the security is already fundamentally the lender’s. The court’s observation is necessary merely to check the details concerning price and the like. Three laymen suffice for that purpose. The stringent view maintains that ownership is actually being transferred at this time. Hence, a proper court is necessary. See Ketzos HaChoshen 73:11.

Today, with the advances that have been made in communication and travel and the relative ease of contacting the borrower even when he is out of the town, there is reason to say that even if the borrower is located elsewhere, effort should be made to contact him.

See Bava Metzia 38a. See also Hilchos Mechirah, subsection 15.

See Pesachim 13a.

Kiddushin 76b. The Alter Rebbe’s statement applies to communal levies for charity to which all the inhabitants of a town are compelled to contribute (see Shulchan Aruch, Yoreh Deah, sec. 248 and the Alter Rebbe’s Shulchan Aruch 429:5).

See Arachin 24a.

In his Kuntreis Acharon, (note 3,) the Alter Rebbe notes that this is the intent of the phrase in the Shulchan Aruch (Choshen Mishpat 73:15): “as one who sells it in the market-place,” i.e., as one who sells an item without being pressured to do so. For, as indicated by the beginning of the subsection, the lender is not obligated to actually go out and sell the security in the marketplace.

The Alter Rebbe continues, explaining that if there is a fixed market price for an article, that price should be given for each article. Even if the lender has expropriated numerous such articles, we consider that there are ample purchasers for the article at that price; we credit the borrower with the full market value for each of them.

The debtor injured the creditor or damaged his property or took property from him by robbery or theft.

The debtor either rented or borrowed the creditor’s article or it was given to him for safekeeping and it was lost, stolen, destroyed, or damaged under circumstances that require him to make restitution.

Kesubos 86a. The rationale is since the lender gave the borrower cash, the borrower must repay him in kind.

Bava Kama 7b.

Subsection 6.

Thus, although the creditor will ultimately be receiving his due, for he will receive a large quantity of bran, there is greater difficulty in selling movable property of little worth.

I.e., as explained in the previous subsection.

Bava Metzia 118a. The rationale is that our Sages understood that a worker hires himself out with the expectation of receiving money to meet his immediate necessities. Giving him goods to sell instead of cash is a violation of the prohibition to delay payment of a worker’s wages (Rashi).

Thus there are three categories of debts: a) loans, which should be repaid with cash, but may be repaid with goods; b) debts resulting from damages or theft, which may be paid with cash or goods as the debtor desires; c) wages, which may only be paid with cash.

Bava Metzia 80b, 82b.

For this will lessen or eliminate his debt.

By providing the owner with a gain that he would not have realized had his tool been left idle.

Needless to say, the lender may not use it without deducting from the debt, for that would be equivalent to charging interest (Shulchan Aruch, Choshen Mishpat 72:1). If, however, the lender makes an agreement with the borrower granting him permission to use it for a fee, he may do so (Sefer Meiras Einayim 72:4).

Lest they be damaged or depreciate while being used and the borrower suffer a loss.

As explained in subsection 18.

And we operate under the principle that a watchman for an entrusted article may not entrust that article to another person without the owner’s consent (Hilchos Metziah U’Fikadon, subsection 29ff. below).

Ibid., subsection 29.

Bava Metzia 80b, 82a. He is placed in that category because he benefits by being secure in the repayment of the debt owed him (Meiri). Thus his responsibilities are greater than those of an unpaid watchman.

Hilchos Metziah U’Fikadon, subsection 30 below.

If the second lender would be paying for the use of the security, there would not be a question of interest. Nevertheless, using it is forbidden for the reason stated by the Alter Rebbe later on.

See Bava Metzia 36a. Since the owner might object to its use by the other person, the fact that it will not be damaged is not significant. The use of an article contrary to the owner’s wishes is considered as theft — see Hilchos She’ilah, end of subsection 5 below.

In his Kuntreis Acharon, (note 4,) the Alter Rebbe explains that the obligation for the second lender to hear the first lender explicitly tell him that he was authorized to pass the article on as a security to a third party is dependent on the ruling of the Tur (Choshen Mishpat 72:27). The Tur maintains that one cannot assume that the first lender is honest and would not give the article away unless he was granted the authority to do so. There are other authorities (Mordechai, Bava Metzia, ch. 6) who differ and maintain that we do not suspect a person who gives an article as security of acting improperly.

Although the Tur forbids the second lender from using the article unless the first lender explicitly states that he was granted the right to permit another person to use it, the Tur does not forbid the second lender from accepting that article as security without such a statement. For even if the first lender was forbidden to give the article as security, he does not incur liability for doing so.

This part of the Alter Rebbe’s Shulchan Aruch is not extant. In the Shulchan Aruch of Rav Yosef Caro, Even HaEzer, sec. 90, it is explained that although a husband has permission to use and profit from his wife’s property (op. cit.: 85:1), he generally does not have the right to sell it without her consent (op. cit.: 90:15).

His intent in doing so would be to avoid the regulations involved in selling the security mentioned in subsection 16ff.

Bava Metzia 66b.

The term asmachta refers to a conditional agreement in which one party makes a financial commitment contingent upon circumstances that he thought would never transpire. Accordingly, even though he verbally agreed to a stipulation, our Sages maintain that he never made a firm decision in his heart to uphold the agreement. As a consequence, his commitment is not binding. See Rambam, Mishneh Torah, Hilchos Mechirah 11:2. See also Hilchos Edus, subsection 12 and notes below.

Talmud Yerushalmi, Sh’vuos 5:1.

Evidently, even if he knows that they are partners, as long as he does not know for certain that they are equal partners, he should not give him half, for perhaps he does not have an equal share.

For he knows that he has a right to that half.

Yechezkel 18:18.

Sh’vuos 31a.

The Alter Rebbe’s ruling is based on that of Rama (Choshen Mishpat 123:15). Their motivating principle is that a decision will be made by the judges according to their perception of the situation and their knowledge of the law. All the litigants need to do is present the situation accurately before them. The Sifsei Kohen (123:32) differs and maintains that it is acceptable to give a person power of attorney if he has superior powers of persuasion provided he tells the truth. His perspective appears to be that the manner in which the information provided to the judges is framed is also significant. Hence, it is acceptable to choose to be represented by someone more capable of doing so.

At present, the use of a toen rabani, “a rabbinical legal advocate,” to argue a litigant’s case has become an accepted convention in contemporary Rabbinic courts. The motivation for this practice should, however, be only “to save the exploited from his abuser” (see also Rambam, Hilchos Sanhedrin 2:7). The court should take care that the advocate the litigant chooses shies away from legalistic acrobatics which delay the reaching of a verdict, while spiralling the legal fees, to the financial benefit of the advocates, but to the anguish of the litigants. See also the commentaries to Avos 1:8 and Tumim 163:14.

For it is undesirable to further the interests of a gentile over those of a Jew.

Alternatively, referred to as Seder Tikun Sh’taros, a work that provides the appropriate wording for various legal documents. See also Nachalas Shivah, sec 44.

And thus one might say that he personally is not presenting a mistruth.

I.e., he may claim that perhaps the deceased paid a debt, even though he is not certain whether this is actually so.

Thus the claim would not be an outright lie.

100 zuz, i.e., 100 silver pieces of the silver pieces used in the Talmudic era.

Sh’vuos 31a.

I.e., a person who admits a portion of a claim is required by Scriptural Law to take an oath denying the remainder of the claim (Bava Metzia 3a). Hence were the debtor to be honest and admit owing the debt, he would be required to take an oath regarding the second portion of the claim. Now taking an oath is undesirable, even when the oath is true (see subsection 30 and notes; see also Chasam Sofer, Choshen Mishpat, responsum 90, who writes that the way of the Jewish people is to forfeit money and use all tactics possible rather than take an oath). Thus it would seem preferable for the person to lie and deny the claim outright rather than admit to a maneh and be forced to take an oath concerning the second maneh.

I.e., if the three plaintiffs lodged the claim together without witnesses to support them, the defendant’s denial would be allowed to stand. Hence, from a purely practical point of view, it would be advantageous for them to adopt the strategy the Alter Rebbe mentions. Nevertheless, it is forbidden for them to do so.

In his Mishneh Torah, Hilchos Toen ViNitan 1:12, Rambam explains the principle of gilgul sh’vuah as follows: “Whenever a person is required to take an oath — whether of Scriptural or Rabbinic origin — [the plaintiff] can require him to include in his oath [a denial of] any other claim that would obligate [the defendant] financially.”

Shmos 23:7. See the Yeraim (sec. 235) and the Sefer Mitzvos Gadol (positive mitzvah 107) who consider this one of the 613 mitzvos of the Torah. Even though Rambam does not include this charge in his reckoning of the mitzvos, he acknowledges its importance (Mishneh Torah, Hilchos Toen ViNitan 16:9-10).

Although this is somewhat of an evasive approach, since it does not involve an outright lie, it is not considered a violation of the charge to distance oneself from falsehood. See Sifsei Kohen 75:57 and the sources cited there.

For oaths can be required on the principle of gilgul sh’vuah only when the defendant responds to the claims in a definite manner [Shulchan Aruch (Choshen Mishpat 75:2)]. To protect the plaintiff’s interests, a conditional ban of ostracism is, however, issued against anyone who knows of an obligation to the plaintiff and does not acknowledge it (ibid.:9).

And as a result, the creditor accepts a compromise.

In the original, chayav latzeis yedei Shamayim — lit., “he must honor his liability to Heaven.” I.e., although he is not obligated to pay according to the rules of an earthly court, G‑d holds him liable.

Since the creditor waived a portion of the loan, the debtor has no financial responsibility to him. Nevertheless, since the creditor did so unwillingly, only as a result of the debtor’s contriving, the debtor still has a moral and spiritual obligation to pay the debt. Imrei Yaakov interprets this as meaning that there is a Heavenly judgment for retribution hanging over him until he makes restitution.

See also Shulchan Aruch, Choshen Mishpat 87:21, which states that the court should endeavor to prevent an oath from being taken. See also ibid. 12:2 which states that it is preferable for a court to negotiate a compromise so that the litigants will not be required to take oaths. As stated there, a compromise has the further advantage of preventing ongoing discord.

Shmos 22:10.

Sh’vuos 39b.

Ibid.:a, referring to Bamidbar 16:26.

Taking a false oath involves the desecration of the sanctity of G‑d’s name. The plaintiff should be willing to suffer a financial loss rather than cause this to happen. This applies even if his claim is just and the defendant actually owes him money.

Bava Metzia 118a. See Hilchos Gezeilah, sec. 34 below.

I.e., he cannot be required to pay by the court. He must, however, take a sh’vuas heses, an oath of Rabbinic origin, affirming his claim not to know of the obligation (Shulchan Aruch, Choshen Mishpat 75:9).

I.e., he tells the defendant: “Perhaps you borrowed from me.”

When the doubt is whether he ever undertook the debt, he is only morally obligated when the other person demands payment, for he is not certain that he ever incurred liability. In this instance, however, he certainly incurred liability. Hence, unless he is absolutely certain that he discharged his responsibility, he remains morally obligated.

Talmud Yerushalmi, Gittin 1:4.

Gittin 14a. See Hilchos Mechirah U’Matanah, subsection 6, and notes, which discuss the effectiveness of this wording with regard to a present.

Ibid. 11b, et al. The rationale is that since acquiring property is to a person’s benefit, we assume that he would desire to do so and would agree that the person acquiring the property on his behalf act as his agent.

Thus when the agent takes the money on behalf of the lender, it is as if it has already become the lender’s property and he is the sole owner. Hence, the borrower may not retract. Nevertheless, until the lender actually receives the money, the borrower is responsible if it is lost, stolen, destroyed by factors beyond his control, or the like (Shulchan Aruch, Choshen Mishpat 125:1).

For it is as if he gave money belonging to the lender to another person without the lender’s permission. Indeed, according to many authorities (see Sifsei Kohen 125:7), even if the borrower has financial resources, the lender may demand payment from the agent without suing the borrower first.

Bava Kama 60b, 117b, et al, see also Hilchos Gezeilah, subsection 2 below; Hilchos Nizkei Mammon, subsection 10 below.

I.e., legally, the transfer of ownership does not represent a problem.

Gittin 32b.

And the giver or lender may retract.

See Hilchos Mechirah U’Matanah, subsection 6, in this text.

Kiddushin 38b.

Devarim 15:1-2 states: “At the end of a seven year [cycle], you shall effect a remission.... Everyone who is owed a debt by a colleague must release the debt.” Sefer Ha ­Mitzvos (positive commandment 141) and Sefer HaChinuch (mitzvah 477) consider this as one of the Torah’s 613 commandments.

Our Sages (Gittin 36a) establish an equivalence between the prohibitions against agricultural work in the Sabbatical year and the mitzvah to remit debts at that time and maintain that the observance of these two mitzvos is interrelated. When the observance of the agricultural obligations of the Sabbatical year are not required by Scriptural Law, there is no Scriptural obligation to remit debts.

Now, from the time of the exile of the tribes of Reuven and Gad and half the tribe of Menashe (approximately 150 years before the destruction of the First Beis HaMikdash) onward, the observance of the agricultural obligations of the Sabbatical year have not been mandated by Scriptural Law (Rambam, Mishneh Torah, Hilchos Shemitah VeYoveil 10:8-9). Thus according to Scriptural Law, there is no requirement to remit debts in the present age. Nevertheless, our Sages (Gittin, loc. cit.) ordained the remission of debts to be observed in the Sabbatical year both in Eretz Yisrael as well as in the Diaspora as a remembrance of the original obligation. This follows the perspective of Rambam (Mishneh Torah, Hilchos Shemitah 9:3) and the Shulchan Aruch of Rav Yosef Caro (Choshen Mishpat 67:1). Rama, however, quotes many Ashkenazic authorities who maintain that the remission of debts does not apply in the Diaspora.

Shiviis 10:3.

Devarim 15:9.

Indeed, this charge is considered as a Scriptural prohibition, one of the Torah’s 613 commandments [Sefer HaMitzvos (negative commandment 230) and Sefer HaChinuch (mitzvah 475)].

The Rebbe questions whether withholding a loan in the present day violates this prohibition since the remission of debts is no longer a Scriptural command. He concludes that even if one were to say that the said prohibition does not apply, by failing to offer such a loan, one violates the positive commandment (subsection 1) to offer loans to a person in need (Likkutei Sichos, Vol. VII, p. 355).

Shiviis, loc. cit., ascribes this ordinance to Hillel the Elder.

Rav Chisda, Gittin, 36b-37a, states that the term refers to the phrase pruz buley ubutey, meaning “An ordinance on behalf of the rich and the poor,” i.e., it prevents the rich from violating the Torah’s admonitions and it benefits the poor, because it allows credit to be extended to those in need.

Shiviis 10:4.

In which instance, as the Alter Rebbe continues to explain, the debt would be remitted according to Scriptural Law.

See subsection 36.

In his Shulchan Aruch, Choshen Mishpat 67:19-20, Rav Yosef Caro states that the court should draw up the pruzbul as a formal legal document which is then given to the lender. Rama differs and maintains — as the Alter Rebbe states here — that a written pruzbul is unnecessary; a verbal statement is sufficient.

Shiviis 10:2.

Devarim 15:2. Sefer HaMitz ­vos (negative commandment 230) and Sefer HaChinuch (mitzvah 480) consider this prohibition as one of the Torah’s 613 commandments.

As explained in Makkos 3a, when a person makes a stipulation that a debt will not be remitted by the Sabbatical year, the debt is remitted. For the stipulation runs contrary to Torah Law and we apply the principle, whenever a stipulation runs contrary to Torah Law, the stipulation is of no consequence, for it implies that a person’s statements can countermand G‑d’s mandates. When, however, the person agrees never to nullify the debt even though the Sabbatical year passes, his statements do not countermand G‑d’s mandates. Instead, he is accepting upon himself an obligation despite the fact that the Torah frees him from liability.

Gittin 33a. It is acceptable, even if they are unlearned. See Rama (Choshen Mishpat 67:18) and commentaries.

Likkutei Sichos, Vol. 24, p. 316, states that it is customary to make this declaration after reciting the annulment of the vows on the eve of Rosh HaShanah before the advent of the Sabbatical year. The Rebbe would conduct himself in this manner. Nevertheless, as stated by Rama (op. cit.:20), it is not necessary for the lender to appear in person before the court. Instead, he may transfer his debts to them in their absence. Indeed, the Rebbe encouraged Rabbonim to publish pruzbul forms to make it easier for this practice to be observed (Likkutei Sichos, op. cit.).

{To emphasize the dearness of this practice, the Rebbe suggested that even people who are not owed any debts make a small loan before the Sabbatical year so they can make a pruzbul (ibid., p. 317).}

Gittin 37a states that it suffices to possess enough land upon which a cabbage stalk can take root.

For an article attached to land is considered as landed property. This applies even if the borrower possesses a flower pot with a hole in the bottom and it is situated above soil {Gittin 37a, Rav Yosef Caro’s Shulchan Aruch (Choshen Mishpat 67:22)}. For any produce growing in such a flower pot is considered as connected to the ground.

The reason it is necessary for the borrower to own land is that most promissory notes are used to expropriate land. Since this is the common practice, we assume that our Sages established their ordinance in accordance with it (Rashi, Gittin 37a). Alternatively, when there is a lien on real estate for a debt, it is considered as if the debt has already been paid before the beginning of the Sabbatical year (Rabbeinu Shimshon, Shiviis 10:6).

The transfer of land is effective based on the principle mentioned in subsection 32, “[Property] may be acquired for a person outside his presence.” In this instance, his acquisition of the property carries with it an obligation — for by acquiring the land, his debt will remain in effect after the Sabbatical year. Nevertheless, since his acquisition of the land is itself desirable, the act is considered to his benefit. This is a leniency followed so that the pruzbul will be considered valid (Sefer Meiras Einayim 67:44). Alternatively, this acquisition is considered as being to the benefit of the borrower, because it enables the pruzbul to be effective. In this way, the borrower will find people willing to lend him should he need money again in the future (Aruch HaShulchan 67:11).

Devarim 15:1. Note the interpretation in the Sifri.

The Alter Rebbe is referring to a difference of opinion between Rabbeinu Asher and Rambam (Mishneh Torah, Hilchos Shemitah VeYoveil 9:4). The stringency mentioned by the Alter Rebbe follows Rabbeinu Asher’s view. Rambam, by contrast, maintains that a creditor can demand payment throughout the Sabbatical year. Although the Alter Rebbe is not definitely stating an inclination toward Rabbeinu Asher’s view, he is implying that the initial preference is to respect it.

Devarim 15:2.

As the Mishnah explains at the conclusion of tractate Shiviis, after the conclusion of the Sabbatical year, there is no obligation to repay a debt. Nevertheless, “our Sages’ spirit derives satisfaction” when such a debt is repaid. When, however, a person comes to repay such a debt, the creditor must tell him that the debt has been remitted and he is under no obligation to pay it.

Devarim 15:2; as interpreted by Gittin 37b.

Dvar, translated as “matter,” also means “word.” This leads to the interpretation quoted by the Alter Rebbe.

This applies only when a person seeks to return a debt after the Sabbatical year has passed. If the debtor does not seek to return the debt, it is nullified even if the creditor remains silent.

According to Rambam’s opinion, seemingly, even if a person made a pruzbul at the end of the sixth year, he should make a pruzbul at the end of the seventh year to enable him to collect any loans made during the Sabbatical year. Indeed, there were occasions when the Rebbe made a pruzbul at the end of the seventh year despite having made one in the previous year. On other occasions, however, he did not do so (see Otzar Minhagei Chabad — Tishrei, p. 41).

The years mentioned give us some appreciation of when the Alter Rebbe’s Shulchan Aruch was written and revised. 5544 (1783-1784) was probably the last Sabbatical year observed before the Alter Rebbe wrote this portion of the Shulchan Aruch. 5565 (1804-1805) was the Sabbatical year observed before his revision of the text and 5572 (1811-1812), the Sabbatical year observed before the Alter Rebbe’s sons prepared the text for printing. In our time, 5775 (2014-2015) is a Sabbatical year.

This reckoning of the Sabbatical years follows the approach of Rambam (Mishneh Torah, ibid. 10:3-6). Although other authorities differ with his calculations, they are accepted by the Rav Yosef Caro and Rama (Choshen Mishpat 67:1). See Sefer Meiras Einayim 67:5.

Today, when it is common to lend money at interest, various arrangements known as iska or heter iska are used. The general rule for such arrangements is that a portion of the money is given by the lender/investor as a loan and must be repaid regardless of what happens with the venture. The other portion is provided as an investment. The recipient must invest the money and the profits and losses from this portion belong to the lender/investor. The recipient must also be paid a small fee for his management of the investment. See Hilchos Ribis, subsection 36.

For this is not considered as a loan, but rather as the property of the lender/investor.

Shiviis 10:2.

Rashi, Gittin 36b.

All that is necessary for the lender to do is to take ownership of the security that is in his possession. The lender may not sell the security in his possession until he follows the guidelines given in subsection 16ff. Nevertheless, since the lender is in possession of the security, the initiative to change the status quo is the borrower’s. Hence the lender does not have to demand payment of such a debt.

Makkos 3a.

Shiviis 10:1.

This applies even if he has not demanded that payment be made by a specific date.