Laws Pertaining to Lending and the Repayment of Loans

  1. It is forbidden for the lender to sue the borrower for the
    money he owes if he knows that the borrower doesn’t have the ability to
    repay the loan: “You shall not be to him as a creditor” (Shemos 22:24) It
    is even forbidden for the lender to present himself to the borrower, for when
    the borrower sees him he will feel shamed. If the lender presses his claim
    when the borrower does not have the ability to repay the loan, it is as though
    he were putting the borrower through a judgment of fire and water. (Bava Basra
    75b) It seems that this prohibition applies only when the lender knows that
    the borrower does not have the money to repay the loan. If he thinks that the
    borrower might have the money, the prohibition does not apply. Nevertheless,
    the Peleh Yortz seems to hold that the prohibition applies unless it is
    clear to the lender that the borrower is capable of repaying the loan. In any
    case, all the poskim agree that it is forbidden to speak harshly to the
    borrower or embarrass him in public.

  2. The lender is permitted to remind the borrower of his debt
    because he might have forgotten about it. Also, it seems clear that the lender
    can sue for repayment of the loan if he gave the loan on the condition that he
    could sue for repayment.

  3. The receipt which is given to the borrower when he repays
    the loan should mention the date of the document which attests to the loan. If
    the date is not mentioned, at least the amount of the loan should be
    mentioned. A receipt which says only that the borrower repaid the lender
    nullifies any claim that that lender may have for the repayment of any loan
    made to the borrower.

  4. If the borrower is certain that he owes money to the lender
    but the lender says that he is certain that the borrower has no outstanding
    debt, the borrower is exempt and has no obligation even to Shamayim to
    repay the loan. The statement of the lender implies that he relinquishes his
    claim and has no desire to recover the money he lent. (Some say that the
    borrower is exempt only if it appears from the words of the lender that he
    really means to relinquish payment, and he has not merely forgotten about the
    loan or made a mistake.) But if the lender says, “I did not give you a loan,”
    or “You have paid me,” the borrower is obligated to repay the loan if he
    knows that he did not repay it.

  5. If the borrower wants to repay the loan before it is due,
    he may do so even if the lender objects because he does not want to be
    responsible for the money until the date stipulated for repayment of the loan.
    The objection of the lender is disregarded because the establishment of a time
    for repayment of the loan was made in the interests of the borrower. But if
    the borrower wants to repay the loan before it is due because if he holds the
    money he will incur a loss (because of, for example, changes in the currency),
    the lender is not obligated to accept payment until it is due.

  6. If the borrower wants to repay the loan little by little
    before it is due, the Shulchan Aruch holds that the lender cannot refuse even
    though he does have a legitimate complaint against the borrower. The Shach
    holds that the lender can refuse. Everyone agrees that if the loan has come
    due, the lender can say, “Give me everything you owe me in a single payment.”

  7. It is forbidden for the lender to keep a document attesting
    to a loan once the loan has been repaid or the borrower has been informed that
    he need not repay it: “Let not wickedness dwell in your tents.” (Iyov
    11:14) A lender who wants to return the document, but delays doing so, also
    violates this prohibition. A lender who refuses to return the document
    attesting to a loan that has be repaid should be put into nidui for
    violating this prohibition, which is from Divrei Kabbalah.

  8. It is a mitzvah for children who receive an inheritance
    from their father to repay his debts, even if they have received only moveable
    property. In repaying their father’s debt’s they fulfill the positive
    commandment of honoring one’s father, for it is a disgrace to their father
    that he be counted among those who, like the wicked, borrow and to do not pay
    their debts. But children who do not receive an inheritance from their father
    have no mitzvah to pay their father’s debts even if their father commanded
    them to pay his debts. Nevertheless, the poskim have written that it is midas
    chassidus for the son to save his father from punishment. He should make an
    effort to get the creditors to relinquish the debt. This gives his father
    great nachas ruach.