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Seizing Personal Assets to Repay a Loan 

Rav Yitzchok Grossman , Rosh Kollel of Greater Washington and Dayan at the Bais HaVaad

 

Question: If a borrower doesn’t repay a loan, can beis din seize his personal assets?

Answer: Yes. Beis din certainly seizes personal assets to repay a loan.

There is a debate in the Gemara if beis din can seize all the assets of the borrower, or if they have to let him retain some personal assets. Most Rishonim do permit the borrower to keep some of his personal belongings, albeit not much. He is allowed to retain enough food to last for 30 days and enough clothing to last for 12 months. Even then, he can only retain food and clothing for himself, and not for his wife and children. Furthermore, the borrower would only be allowed to keep an average level of food and clothing. Meaning, he would be allowed to eat and dress like an average person – not like a pauper but also not like a rich man.

Whether or not he can keep his house is a subject of debate. The Rashba, on the one hand,  says his house can be seized. However, the Maharit disagrees and says that one’s home is as essential as one’s clothing, and therefore, a borrower is allowed to remain in his home. Again, he would only be allowed to keep 12 months’ worth of his home and only enough living space for himself, and not for the rest of his family. He also would only be allowed to remain in an average home, not in a luxurious one.  

 

Question: Does this halacha also apply to other financial obligations, such as if someone owes money for damaging someone else’s property? 

Answer: There are two opinions about this, both of which are cited in the Shulchan Aruch. One opinion holds that the rule that a debtor is allowed to retain some assets only applies when the debt is in the form of a loan. All other debts do not have this limitation and, in such cases, all property can be seized. Another opinion holds that the same rules apply in all cases of debt, and the debtor is always allowed to retain these specific assets. 

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