Readers’ Scoop: Stuck In The Mud With Loans

Readers-Scoop-Logo smallI am not an educated writer so please forgive and don’t pick and slice the wording of this letter. I was a simple Lakewood man that made a good parnasa over the years. When times were good I was fortunate enough to share with others and to lend out money to various people as well. I always made sure that the loans were backed up by a co-signer, just in case the borrower won’t be able to pay it back. In addition I lent out money to various people for business purposes, with an agreement that they will pay interest in return,which was set up with a “heter iska” which permits you to do so. now that I lost my job I don’t have money for basic necessities. I tried to collect all debt that is owed to me but everyone claims they don’t have money to pay back at this time.

I know that these people are all honest individuals. My question is, are these people able to send their children to sleep away camp while at the same time I can’t afford regular local day camp? are they allowed to drive new leased cars while my gas and electric are about to be shut off? Are they allowed to go to summer homes or bungalows while I sit here and sweat to buy groceries? Are they allowed to but jewelery and presents etc. while I struggle to pay tuition?

Where do you draw the line of luxury and where do you draw the line of necessity?

I want to express again that I have no complaints but rather I am trying to understand the justice in this phenomena.  Thanks for submitting this letter.

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29 COMMENTS

  1. According to Halachah someone who owes someone money, he must not spend it on luxuries or extras, and must pay back the debt. Furthermore, There are many instances that according to Halachah if one is in debt, he must pay the debt back asap and until he is able to completely pay it back he is exempt from paying Maaser on his money. It is therefore very obvious that if you are exempt from Maaser till you pay back the loan, you surely cant spend your money on luxuries and extras until you are debt free.

  2. number 2 is right. However, the peer pressure from children is so great that people are told that if you don’t want your kids to rebel, or if you want you kids to have any self esteem, than you have to give them what their friends have(camp, brand name clothes, lots of cleaning help, nice car, every day the kids need one more thing)
    Some don’t have the backbone to do what is right and actually cut back if they don’t have

  3. I know nothing about collecting debts, but what methods have you used to try to collect the debts? If you have loan documents, can’t you go to court and get a judgement against the borrowers, which would not allow them to spend money on luxury cars without paying you first?

  4. Welcome to the loan shark game my friend, these guys are wrong and they should get rid of their leases and pay you back . BUT usually when you have a client for a hard loan there is a reason for it, these guys cant get it any where else. Thats why we get the high points on our money bc we are taking that risk of never seeing money again. I feel sorry for you but high return = high risk and you got stuck under the 8 ball. Take the co signers to beis din.

  5. Great letter
    May u find a new parnusah soon!
    I can’t understand how people send kids to camp, but don’t pay full tiution? The schools should crack down!

  6. Great letter
    May u find a new parnusah soon!
    I can’t understand how people send kids to camp, but don’t pay full tiution? The schools should crack down!

  7. if the co-signers claim they don’t have money are they allowed to live a luxury life style? what is the halacha in this situation?

  8. Ya what about all those people who don’t even pay a quarter of their childrens tuition and have the brand new Honda accord and odessy every 18 months,no school should allow it they should make you write on your registration form howmany and what cars you drive

  9. i did not purchase a house yet as a fear to borrow more than my means. people need to understand that there is a chiyuv to lend peopel money but there is also a chiyuv to pay back.

    i have run the numbers and it makes no sense to purchase a house or town house that by the time you finish with the basement ( which will need shtey diras) you will be looking at 510K for simple upgraded. put 20% down and add in tax and you are looking at $3200 a month for mortgage and taxs. WHY BUY???? .

    do you need to paY $2200 A MONTH (+ 1000 FOR BASEMENT) TO OWN A HOME!!!!!

    LAST YEAR MY MOSAD DEMANDED I PAY $5000 PER CHILD WHICH WAS A SIGNIFICANT JUMP.

    . I TOLD THEM TO GO COLLECT FROM ALL THAT ALREADY OWE FROM PREVIOUS YEARS AND ESPECIALY THOSE THAT OWN HOMES IN HOW EVER WAY THEY DO IT.

    I WORK AND iAM LUCKY AS I USUALY PAY UP TUITION BEFORE SCHOOL STARTS OR WITHIN A FEW MONTHS. I PAY IN ADVANCE BECAUSE MY CHILDRENS CHINUCH IS IMPORTNAT TO ME. I WISH I COULD AFFORD TO PAY FULL TUTION BUT AT LEAST I PAY WHAT I AM COMMITED TO PAY.

  10. This is a sad situation. I hope reading such a letter doesn’t deter people from lending out money. I personaly had a good experience lending money and getting paid back when I needed it.

  11. its a serious problem and the rabanim of this town should mediate and help those that need it and figure out the budgeting of neccessaties for each particular case.

  12. great letter!! ive seen it first hand myself!!

    i to had decent money to help others and lend with heter iska.

    Like previously said high return means high risk.

    I currently am squuezing it to pay simple groceries and bill etc. bec the borrowers have no money (at least they say so…).

    But i understand thats the risk!! no taanus on them at least theyre not denying the loan.

    ONLY MISTAKE: I NEVER HAD A SAVINGS ACCOUNT!!!!!!!!!!!!!

  13. Question for all of you about a lease

    I drive an old yeshivish car.

    The car just went on me. After putting in thousands of dollars into this car, I will now have to shell out $1500 to fix it. I dont have the money, especially becasue it will probably break again in half a year.

    To buy a new decent car is at least $6,000 to $8,000.

    I need a reliable car. I can’t have my car breaking down on me every other month.

    So what do I do? I don’t have the money to but a new decent car, or to just put more money into my present car and have it last maybe another 6 months.

    I’m thinking of leasing a car, at about $200 a month. Makes sense to me. Don’t forget, I need a reliable car for my job.

    Now I see that everyone thinks that having a lease is a luxury. I’m confused. Maybe you can explain to me why it makes more sense to put in $1500 into my alte yeshivishe clunker, instead of just leasing.

    Scratching my head……

  14. Lease,
    I had the same dilemma. I always questioned how e/o had such nice, new leases.I Thought they were being irresponsible just so they could have a nice car. I always asked, “what happened to the yeshivish cars that kollel people used to drive?’ But I think the reality has changed. THe used cars we looked into, when our 12 year old camry gave out, were junk for lots of money and lots of money to put in. We couldn’t afford the time or money to have the car in the repair shop all the time,We finally changed our view and we’re leasing for less than $200 a month and so are our kollel kids for the same reasons!

  15. Many people who borrow money have no idea how they will pay it back! AFter a while their debt grows so large that they know they’ll never pay back. So they just keep on borrowing and then negotiate with the credit card companies and other lenders as if those lenders are the bad guys. They even borrow for less than necessaties since they don’t ever pay back. So many people have lived this way for decades.

  16. #15- Why is the Mosad obligated to collect your loans? I feel for you that people are not paying you what they owe you. Is that the Mosad’s fault?

    To the author, I suggest you take the other parties to beis din. Generally, a psak beis din can be used as binding arbitration, which in turn can brought to court and stamped as a court order. Then you can go to the sherriff who can attach a lien on the other person’s property. A lien can attach to that person’s luxury car too.

    If you get a psak din, I suggest you go to a debt collector. A friend’s father does this for a living and has been very successful. I believe they take about 30%. It is better than nothing.

    I understand other people not having the money in these distressed economic times. However, assuming what you say is true, they should be paying a mortgage on a summer home while you suffer. Hatzlacha.

  17. problem is you probably want all up front
    i have had the problem and then when i worked out a payment plan with the debtor they were very agreeable
    ie. if they owed 50k pay 500 amonth till you “get” real money and if not it will take 12 years but i;ll get my money

  18. what do I do, do I lease an accord for $200 x 36 months, =$7200 plus whatever other leasing related expenses, OR do I buy a 3yr used car for $7500, and then still have a car afterward….

    nothing more than a bunch of excuses to drive the latest car.

  19. question for the letter writer . why is it that its only now that your in a bind that you take issue with the people that borrowed from you . if its wrong to send your kids to camp then it should make a difference whether the lender is rich or poor . if its wrong its wrong ! please explain why you are only complaing about this now ! is it because it affects you now at this point because you lost your pants? or are you complaining because you honestly feel thats its wrong regardless of your own personal dill;ema??

  20. Not everyone has 7500 to lay out at one time. 200 amonth is possible but not 7500 at one time. And where do you find the 3 year old car for 7500? The ones I find all cost more like between 11k and 12k.for 7k you get a 5 or 6 year old car that is 8 or 9 years old after 3 years and then the bimonthly trips to the mechanic start….but each to their own opinion.

  21. I once heard a zug benogea cars from a mechanic musmach in lakewood. He wanted to tayna that owning a reliable car costs an average of 200 a month. The cheshbon is that either you spend thousands up front on a used car and after a few years start spending hundreds in repairs every few months and the average between what you paid upfront and repairs will be about 200 a month. Or lease for 200 a month and never have to change even a battery. So its realy just a matter of style. I personaly go the used car mehalach as a yeshivishe yungerman it doesn’t past for me to drive the latest model but financialy it seems to be about the same.

  22. to the author of this letter-you are a tzadik- hashem will for sure help u soon

    the camps shouldent allow kids in until the schools send them a letter that the tuiotion was paid. & the schools shouldent allow them back unless tiution is paid in full.
    anyone with budgeting problems that cant figure out that tiution comes 1st- needs a doctor
    btw- mesilah offers this service- to help you budget- try it

  23. Could someone tell me where i can lease a car for less than $200 a month? last i looked a minivan like i have would be closer to $300. plus money down and due at the return. My mileage would also be limited. Instead i bought a four year old Minivan for $8,000. Six years and over 80k miles later it still going strong. Yes there were repairs along the way but aside from brakes and tires ,really not much. A lease would be $300 x 72 = $21,000 plus other fees for six years. Add the insurance that the lease requires and the cost the body work and i dont think one can argue that the price would be the same! oh< and i still have the van and we are well into the seventh year….

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