Archive for December, 2009

Going to a Borrower’s Wedding

Monday, December 28th, 2009

Q:

I loaned a person approximately $5000 as he was making a wedding. We have been friends for years – part of the same kehilla but I wouldn’t be invited to weddings. Since the loan he feels very indebted and it feels like we are breaching Ribis D’varim. 1/ How long after the loan does Ribis apply. Practically the friendship may be stronger. 2/ Should the loan be converted to a gift, and he can pay back if he wants to as a gift. Would this change the ribis problem as the closeness is now from the gift?

Rabbi Yehonoson Dovid Hool answered:

If he would not have invited you to the wedding without the loan, you may not attend the wedding. The invitation would constitute Ribbis Devorim, but partaking of hospitality at the wedding would be proper Ribbis.

Once the loan has been repaid, you may receive benefits or favours from the borrower if sufficient time has passed, and the size of the favour or gift is small enough that one would not connect it to the loan.

If you were absolutely certain that the invitation was not because he feels indebted but rather simply because you have become closer, albeit via the loan, it may be permitted, but this is very difficult to define, and seems not to be the case in your case.

Converting the loan into a gift, from a practical point of view is inadvisable. Circumstances that apply today may not apply tomorrow. Even if the loan was genuinely converted into a gift, with no obligation whatsoever to return it, there would still be a problem of Ribbis, which applies even after a loan was repaid, unless the time or size of the gift indicated otherwise, as explained above. (Perhaps one could argue that if the loan was converted into a gift then any favours given would be for the sizeable gift rather than for the one-time loan.)

Giving Information

Monday, December 28th, 2009

Q:

I have recently been given the job of interviewing several candidates for an assistant position for someone who will be working as my assistant at my office. My boss handed me several resumes of people he is interested in me interviewing. One of the people is a friend of mine, whom I really don’t want to work with, however it’s not that I think she would be bad at the job; I just don’t think she would work well with me. However, I don’t know if telling my boss that I don’t want her to work under me is taking away from her parnasa or speaking lashon hara or anything else that I shouldn’t be doing according to halacha. Please help me with this situation!

Rabbi Yehonoson Dovid Hool answered:

Your boss expects you to interview candidates for the job, that will be best suited to work as part of the team that already exists. If you genuinely feel that any particular candidate would not work well with you, you are obliged to point this out to the boss. This is part of the responsibility that he has charged you with, and it would not be right to withhold this information from him. However, you may not exaggerate or add any uncomplimentary features that are untrue. You should include in your report all her advantages, but nonetheless point out to your boss your assessment that she would not work well with you. Then your boss has the necessary information that he requested, and he can make an informed choice as to what is best for his business.

Teshuva for Shoplifting

Wednesday, December 23rd, 2009

By Rabbi Yitzchok Basser

Q:

In his teenage years, someone shoplifted from a store owned by a family friend. He wants to make amends. Is it sufficient to anonymously return the value of the item stolen, or must he take the difficult step of identifying himself and asking Mechila.

A:

It is preferable to ask Mechila, but he is not required to do so. In a case of difficulty one may be lenient and not ask.

There is apparent contradiction regarding this issue. The Rambam in the Laws governing Personal Injury (Hilchos Chovel U’mazik 5:9) states that there is a distinction between causing another person bodily harm, and damaging monetary possessions. The latter needs only to pay for the damages incurred, where as the former must also ask Mechila, forgiveness, from the victim. This would imply that stealing, which only involves monetary harm, would not obligate requesting Mechila.

However, in the Laws of Teshuva the Rambam (2:9) states that Teshuva only helps for transgressions Bein Odom LaMokom, between man and his Creator. However regarding transgressions against another person, such as causing him bodily harm, or cursing him, or stealing from him, one will never attain atonement until he returns what has taken, and appeased his friend.

The Meforshim point out this seeming contradiction. The Meforshim take two approaches in answering this question. The Lechem Mishna (Hilchos Chovel) answers by noting that the Rambam in Hilchos Teshuva refers to stealing as Gezaila, which connotes a form of thievery whereby the thief takes the object by force from the owner, and proceeds to derive personal benefit from the object. Such an act causes emotional distress, and therefore warrants asking for Mechila. However the Rambam in Hilchos Chovel is referring to damaging another person’s possessions, which lacks the element of causing significant emotional distress, and would therefore not require asking Mechila.

The Sefer Hakovetz (see also Darchei Dovid B”K 91b) takes a completely different approach. He understands the Rambam in Hilchos Chovel to be discussing the minimum obligation to attain any level of atonement. Only on who causes bodily harm would be included in such an obligation. However in Hilchos Teshuva the Rambam discusses the proper approach that a penitent person should have, and that is to request Mechila even for transgressions that are not as severe as causing bodily harm.

Getting back to our question, whether a shoplifter is obligated to ask Mechila, it would depend on the two approaches. According to the Lechem Mishna, since the stealing took place in a manner that did not cause emotional distress, he would not be obligated to ask Mechila.

However, according to the approach of the Sefer Hakovetz it would be proper to ask Mechila.

In our case, since asking Mechila involves emotional difficulty, and according to the Lechem Mishna there is no obligation at all to ask Mechila, and even according to the Sefer Hakovetz doing so would not be a strict obligation, one may be lenient and not disclose his identity for the purpose of asking Mechila.

It would be proper to send an anonymous letter apologizing for his indiscretion and asking for forgiveness.

Is Factoring Ribbis?

Wednesday, December 23rd, 2009

By Rabbi Yitzchok Basser

Q:

I would like to purchase a business that engages in Factoring. This involves purchasing debt at a discount and collecting it at full value. For example, Company A owes Company B $100. The factoring company would buy the note for $75 from company B, and collect $100 from company A when it becomes due.

Should Company A default, there are two types of arrangement possible. In a non recourse arrangement, the factoring Company bears the loss. In a recourse arrangement, the factoring Company would be reimbursed by the Seller (Company B) for the full face value of the debt ($100)

Is there a Ribbis problem with either of these arrangements?

A:

A non recourse structure is permitted. In a recourse structure, If Company B is a not incorporated, there would definitely be an issue of Ribbis, and it would require a valid Heter Iska. Even if they are incorporated, according to many Poskim a Heter Iska should be drawn.

The Shulchan Aruch (CM 173:4) discusses the sale of a Shtar Chov, a loan note drafted by a borrower to the lender. The lender is willing to sell this note at a reduced price for cash up front. When the loan matures the buyer will collect from the borrower the full value of the loan. The Shulchan Aruch permits such a transaction only in the event that the buyer accepts responsibility for the non payment of the debtor (a non recourse sale). Should the seller accept such responsibility, there would be a problem of Ribbis (this concept is known as Karov L’Schar V’Rochok Mihefsed). The source of this ruling is the Ramban, who says that this practice is Rabbinicaly prohibited.

The Nesivos Shalom (ibid) brings a number of Achronim that the Ramban is discussing a case that the buyer can be compensated only for the outlay that he provided to the seller. Should he be guaranteed the full value that the creditor would owe, the prohibition would be prohibited by the Torah. Some Achronim say that if the money can be immediately collected, there would be no prohibition.

In our case, since the money owed by the creditor is generally not immediately collectable (typically the money is not due for 30 days), it would only be permissible to structure the arrangement as a non recourse. A recourse arrangement would involve a Torah prohibition (even to collect from Company A) according to a number of Poskim.

However, there is another issue to consider. Rav Moshe Feinstein (Igros Moshe YD 2:63) permits lending money with interest to a Jewish owned corporation. The reason is because there is no personal liability on the part of the owner, there is merely a lien against the corporation’s assets, the Torah does not consider this to be a loan.

In our case if the company selling the debt were to be a corporation or an LLC, there would be no issue of Ribbis according to Rav Moshe Feinstein.

However a number of Poskim disagree with this ruling (Minchas Yitzchok1:3 and 4:16, Har Tzvi YD 126, Bris Yehuda 7 n:66. See also Minchas Shlomo 28). It would therefore be preferable to write a Heter Iska Klali, which would have to be referenced before each deal is made (with any Jewish owned companies).