Freezing Fleeing Assets


Asher lent a large sum of money to his friend,
Moshe, who was having difficulties with his business. Soon after, he
observed that Moshe seemed to be squandering the money. First he made a
lavish bar mitzvah for his son and then he went on a month-long cruise to
the Bahamas. He now hears that Moshe is secretly trying to sell his house
and has bought a one-way ticket to South America. In addition, he knows
that Moshe invested heavily in the shares of the Assad Oil Company, which
are rapidly losing value. Would Beis Din respond to his request to freeze
Moshe’s assets, even though repayment of the loan is not due for another


The Rosh (Chapter 1 of Bovo Kamo, No.5)
discusses a case where a person comes to Beis Din, arguing that he has
reason to suspect that someone who owes him money is about to run away or
to hide his property. He therefore asks Beis Din to freeze the debtor’s
assets, even though payment of the debt is not yet due. He is worried that
when the repayment date arrives, there will be no assets (or debtor)
available from which to collect his debt. The Rosh rules that Beis Din is
obligated to accede to his request as long as the suspicion can be shown
to be genuine. (There is a difference of opinion among the Rishonim (Earlier
Commentaries) whether this is a new rabbinic enactment or an application
of an existing obligation to "rescue the oppressed from the
oppressor".) The Riff (Responsa, quoted by the Nemukay
, Bovo Basro, Riff P.65a) explains that our Sages were
concerned to ensure that loans would be available for those who needed
them (shelo tinol delless bifnay lovin). If a lender saw that he
did not receive repayment of a loan as a result of the lender squandering
or hiding his assets, he would be reluctant to lend money again, even to
honest, responsible borrowers. They therefore gave him the right to freeze
the borrower’s assets till the time of repayment.

The Shulchan Oruch (Choshen Mishpot 73:10)
quotes the above ruling of the Rosh. The Remo, basing himself on
the Trumas Hadeshen (No.305), adds that it has become the custom
for Beis Din to freeze debtor’s assets at the request of the creditor even
if the creditor is unable to clearly show the validity of his suspicions.
The Trumas Hadeshen points out that this could result in the debtor
incurring a loss (he is unable to do business with the frozen assets),
which may be totally unjustified. In order to avoid this, Beis Din can ask
the debtor to provide alternative guarantees. Where the validity of the
creditor’s suspicions is in doubt, Beis Din can require the creditor to
deposit funds with them. In the event the creditor’s suspicions are found
to be groundless, Beis Din will compensate the debtor out of these funds.

Until now, we have limited our discussion to inability to pay debts
which stem from irresponsible behavior. Would the same sanctions be
applied if the debtor’s assets are depreciating through no fault of his
own? The Maharshal (Yam shel Shlomo, Bovo Kamo,
No.20) states that in this case the Beis Din have no authority to freeze
the debtor’s assets. If, as a result, the debtor is unable to repay his
debts, this is deemed to be the creditors bad luck. Hashem will compensate
him for his loss! Should the creditor grab the debtor’s property in
premature payment of his debt, Beis Din will restore the property to its
rightful owner – the debtor! However, The Rivosh Responsa,
(No.109), quoting the Rashbo, states that if the creditor was
looking after the debtor’s property, he may withhold it pending repayment.

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