Shabbat Parashat Shoftim 5782

P'ninat Mishpat: Payment Plans

Case: The defendants (=def) are four agricultural partners who borrowed money/received an investment of 480,000 NIS from the plaintiff (=pl) to prepare for the Shemitta year in conjunction with an otzar beit din. Def were supposed to return the principle plus 40% of any profit. Pl took a bank loan with a mortgage to make money available for def. Def’s endeavor was unsuccessful. They paid partially but admit to owing 254,000 NIS and claim to not presently have the wherewithal to pay back the full loan on time. Def is asking for a new, delayed payment plan. Pl first asked that def borrow money to pay but agrees to the payment plan on condition that def pay the expenses of extending his bank loan. 

Ruling: A debtor should pay back a loan as close to its due point as possible, and so def has abrogated his responsibility written in an agreement and must do all that is possible to pay now. Since there are four equal partners, each should pay 63,500 NIS, even if the others are not able and even by selling non-essential property to obtain cash. Additionally, partners are naturally cosigners for each other’s debts (Shulchan Aruch, Choshen Mishpat 77:1). Therefore, if some of the partners are able to pay more than their share, they are required to do so and then turn to the other partners for repayment when feasible.

Is a borrower without resources required to borrow money in order to pay his creditors? The Shulchan Aruch (CM 97:2) codifies the obligation not to pressure a debtor regarding a case when he does not have the ability to pay. If a borrower would be obligated to borrow to pay, why would even gentle pressure for payment not be justified? Why don’t poskim limit the prohibition to cases where the borrower is incapable of borrowing as well?

There is a machloket regarding paying a worker. Ahavat Chesed (I,9:7) learns from Rashi (Vayikra 19:13) that the reason an employer has a grace period is for him to arrange financing. Shulchan Aruch Harav (CM, She’eila 18) says it is only a matter of proper ethics to borrow to pay wages, because of the mitzva to pay. Mishpetei Hachoshen (Sechirut Poalim, p. 407) suggests that the Shulchan Aruch Harav is not a proof other debtors are not obligated to borrow, as it could be that the ethical matter is only to enable someone to pay a worker on time. He also says that the Ahavat Chesed is not a proof that there is generally an obligation to borrow as it might be unique to workers.

Rav Z.N. Goldberg posited that there is an obligation to borrow to pay debts, especially if a person has property from which to pay but does not want to sell it. Similarly, Teshuvot V’hanhagot (II, 702) says that one who is accustomed to borrow money for his other needs is required to do so to pay debts. So, if the partners are borrowing money to finance other commercial needs, they should do so for this purpose as well. Here, we are not forcing def to borrow money but informing them that there is at least a moral ideal to do so, if it is expected that they will be able to pay off the new loan.

Regarding the idea of a new payment plan, it is permitted to do so with a higher total payment without worrying about ribbit (usury) because someone who borrows money in order to lend it is entitled to be compensated for his expenses (see Piskei Din Yerushalayim VIII, pg. 61).

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