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Answer: [We responded to the querier regarding his situation but are broadening (in brevity) the discussion. We will compare elements of bankruptcy law (focusing on the American system, which is more sweeping than many European systems including Israel) to Halacha, survey how Halacha reacts to that (this week), and relate practically to some common applications (next week).]
Of the two elements of modern bankruptcy law, one is found in Halacha. If a debtor lacks the funds to pay, he must liquidate or give many of his assets to his creditors, or beit din will, in many cases (depending on the type of debt and assets) oversee the seizing of assets. However, the debtor retains basic assets needed for daily living (mesadrin l’ba’al chov – Bava Metzia 113b). All bankruptcy systems do this and regulate the apportioning of payment among various creditors, in a way that differs from the halachic system.
Bemare Habazak - Rabbis Questions (654)
Rabbi Daniel Mann
367 - Kohen Serving as Chazan in Israel
368 - Bankruptcy in Halacha
369 - Bankruptcy in Halacha – part II
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There are a few possible ways for fresh start bankruptcy to become halachically viable. One is that in some cases, the creditors make a settlement with the debtor over the terms of reduced payment. Agreement actually does not make the question moot, because it can be considered agreement under duress. This is because the creditors have to deal with the "threat" of a possibly more detrimental, non-halachic bankruptcy judgment or that the debtor’s remaining assets will disappear before they receive payment (the bankruptcy system takes steps to prevent such disappearances). Regarding agreement under duress, a sale is valid, but a present given under duress (i.e., without a significant return) is invalid (Bava Batra 47b). After citing various opinions and distinctions, the Pitchei Choshen’s (Halva’ah 2:(62)) approach is that the parties’ agreement is insufficient to make debt reduction binding unless finalized without an act of kinyan (which may or may not exist in various cases).
A factor that might validate even debt discharge is dina d’malchuta (the law of the land). There are three main approaches regarding the concept’s extent. One limits it to the direct welfare of the governmental entity (opinion cited by the Rama, Choshen Mishpat 369:8). The Rama (ibid.) rules that it applies much more broadly – to cases in which a law is made to improve society (as opposed to for the government’s perception of justice). The Shach (CM 73:39) argues that even when done to ostensibly improve society, a law that contradicts the Torah is not acceptable (between Jews). The Chatam Sofer (V:44) follows the Rama’s approach, with a slight clarification. We follow dina d’malchuta when it addresses a societal need in a manner that the Rabbis would have instituted the matter if they had the ability. Most poskim (see Igrot Moshe, CM II:62; Rav Daichovsky in Techumin XVIII) follow the Rama’s approach, and in our beit din, we do so with the Chatam Sofer’s addition. However, it is not always clear when a law contributes to society and/or would the rabbis agree to it. (Regarding bankruptcy, the Chelkat Yaakov, CM 32 views it negatively, and the Igrot Moshe ibid. positively.)
A related reason to accept bankruptcy is that it has become the accepted business practice, and business transactions are made with it in mind. The Maharshach (II:113, accepted by the Pitchei Teshuva CM 12:19 and others) posits that in a place where the minhag is to allow a majority of a person’s creditors to grant the debtor leniency in paying them back, it is binding even on those who disagree. However, not all agree that this can go as far as fresh start bankruptcy.
Bemare Habazak - Rabbis Questions Ask the Rabbi: Omitting Tachanun in Selichot in the Presence of Simcha
Kuzari -Rabbi Ari Shvat Kuzari class 8- "Answering Questions on the Kuzari's Proof from Mass Revelation
Rabbis in Midrash
Lessons
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Kuzari -Rabbi Ari Shvat Kuzari class 9 - "Seeing is Believing" (parag. 21-30)
These paragraphs elaborate on the theme that seeing and knowing is better than any attempt to prove logically, and begins explaining the difference between Israel and gentiles.
Ein Aya Various Universal Stages of the Geula Process
Rav Kook examines the various stages of redemption, explaining how (in addition to the obvious oft-mentioned stages of ingathering the exiles, reviving the Hebrew language, army, state etc.) the messianic dream of world prosperity, the State of Israel and world unity can and are realistically and logically gradually coming true.
Kuzari -Rabbi Ari Shvat Kuzari class 8- "Answering Questions on the Kuzari's Proof from Mass Revelation
How do we know that the "claim" of mass revelation to 2,000,000 witnesses at Mt. Sinai is really true? This important class answers all of the questions skeptics ask about this claim of the Kuzari.
Ein Aya Armies Still Necessary for Balance & the War Against Wars
Rav Kook explains why the world was originally divided into the various seemingly contradicting ideologies and cultures, in order to develop each one respectively. Swords or armies symbolize how each respective ideology defends themselves, as well as deters their opposing ideologies and cultures. On the other hand, the messianic era will be one of peace, and Rav Kook explains the transition to that stage, which mankind is already undergoing.
The Land of Israel LGBT'S IN ISRAEL
The question was asked, how can one make Aliyah with the LGBT parades?
Kuzari -Rabbi Ari Shvat Kuzari class 7 - Five Accumulative Proofs of G-d
As a preparation for the Kuzari's classic proof of G-d from the mass-revelation at Sinai, we start here with 5 other directions to strengthen our belief which also contribute to what the Kuzari will present as well.
Ein Aya Muscle & Meaning: The Dual Nature of Gevurah (Physical Strength)
Is physical strength and fitness a necessity or an ideal? Although it if often totally overlooked among topics of Judaism, Rav Kook writes that it clearly is also a necessity to deter the many enemies of Israel, but even in Y'mot HaMashiach, in the Messianic era, to a certain extent, it's ideal continues even after our enemies will have been finished off.
