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Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review

The Morality of Bankruptcy, Part III

By Rabbi Dr. Asher Meir





http://www.JewishWorldReview.com | Last week we discussed the requirement in Jewish law to provide certain basic exempt assets to an insolvent debtor and arrange a repayment schedule. However, none of the rules we discussed allowed for a discharge of the debt as we find in many bankruptcy settlements. The debtor is given a bit of relief from counterproductive or vindictive collection actions, and continues to pay back his debts to the best of his ability.

However, the Torah also provides for discharge of debt. We find in the book of Deuteronomy (Living Torah translation):

    At the end of every seven years, you shall celebrate the remission year. The idea of the remission year is that every creditor shall remit any debt owed by his neighbor and brother when G-d's remission year comes around. You may collect from the alien, but if you have any claim against your brother for a debt, you must relinquish it. G-d will then bless you in the land that G-d your Lord is giving you to occupy as a heritage, and there will not be any more poor among you. (Deuteronomy 15:1-4)

The rationale for such a release is clear: it is sometimes in everyone's interest to give debtors a fresh start, a new lease on life that will give them the ability and the incentive to become productive citizens. If the debts were incurred in good faith but hardship intervened, then the creditor will gain little by demanding full repayment from an indigent debtor and a fresh start is called for.

Some commentators question the existence of a parallel between the Sabbatical year discharge and modern bankruptcy. They point out that the Sabbatical year discharge applies equally to rich and poor, and that only loans are exempt, not other kinds of debts. They also point out that it is considered praiseworthy to pay back cancelled Sabbatical debts when possible.

I don't think these objections are decisive. Debts are only cancelled in the Sabbatical year when they came due before the year begins but were left uncollected. In most cases this would apply specifically to insolvent debtors; debtors of means would have paid up beforehand or have their assets seized. We should add that throughout the Torah the assumption is that loans, which in ancient times were interest free, were given to poor people. Indeed, the release passage itself refers to this, pointing out that if we fulfill this commandment ultimately we will not lose from it because the result will be that "there will not be any more poor among you."

It is true that later Sages instituted a way to circumvent the automatic release of debts in the Sabbatical year.(1) The reason is that being too lenient on poor debtors ultimately works to their disadvantage; if creditors cannot enforce repayment they will not agree to lend and credit will be unavailable. (2) As a matter of public policy the Sages concluded that in that era allowing an automatic release was imprudent,(1) but that doesn't mean that allowing the court discretion to release certain debts, or to allow the Sabbatical year to release them, is somehow against the spirit of the law. The true lesson is that while allowing a fresh start is a worthy ideal, sometimes the economic and social conditions make it counterproductive.

It is true that some debts are not discharged in the Sabbatical year, but that is more an area of similarity than of difference to modern bankruptcy. In modern bankruptcy also different kinds of debts can be treated differently, and fraud in particular is a bar to a release. Jewish law may also consider some debts to persist after bankruptcy, and these should be paid even after a discharge whenever the opportunity presents itself. An example would a benevolent loan given under the understanding that all efforts would be made to repay. (3)

Judaism considers paying debts a positive obligation – a mitzvah. (4) Any time a person incurs a debt, he must do so with good faith and with reason to believe that he will be able to repay. He must then make every effort to obtain the means to fulfill his obligation.

But if unexpected setbacks make it impossible to pay, the Torah suggests an ideal of giving the debtor a fresh start. In many jurisdictions legislatures have identified with this ideal and introduced the ability for debtors to obtain such a fresh start, subject to various legal conditions and review. It is ethical to avail yourself of these laws if indeed your obligations were assumed with good faith, if you are properly eligible for the release, and if you need the discharge in order to obtain a true and fair fresh start in your affairs.

SOURCES: (1) Mishna Sheviis 10:3. (2) See e.g. Babylonian Talmud, Yevamos 122b, Ketubot 88a. (3) See e.g. Responsa Chelkas Yaakov, Choshen Mishpat 32. (4) Babylonian Talmud, Ketubos 86a

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JWR contributor Rabbi Dr. Asher Meir, formerly of the Council of Economic Advisers in the Reagan administration, is Research Director of the Business Ethics Center of Jerusalem, Jerusalem College of Technology.

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