Credit

Is credit considered a loan that requires a Peruzbal?[1]

The general rule is that credit is not considered a loan and hence is not abolished with the Shemitah year. The reason for this is because the credit money is not yet considered owed but rather “to be owed in the future”. However this is only regarding credit that is Halachicly defined as credit which is called “Hakafah”. Thus for example one who sold an item on credit to the buyer at times it is considered a loan and not credit [despite the business term one may give it], and hence the seller is required to perform a Peruzbal prior to the end of Shemitah in order to allow collection of the debt. Whether credit is defined as a Hakafah or as a loan is dependent on a number of factors:

  1. Does this buyer normally have a credit account by the seller or was it a onetime transaction?
  2. Has a bill already been prepared for the buyer?
  3. Is there a due date on the bill?
  4. Is the due date before or after Shemitah?

 

A. Credit accounts-Does the owner of a store that gives his customers credit have to perform a Peruzbal:[2]

One who allows customers to have credit accounts by his store [as is common by minimarkets and the like to allow customers to buy items on credit and pay the bill to the store at the end of the month] then if the bill was already given and the due date falls before the [end of the] Shemitah year, then Shemitah abolishes the debt [and hence the store owner is obligated to do a Peruzbal to facilitate the collection of the debt].[3] If the due date falls after the Shemitah year then the Shemitah year does not abolish the loan and a Peruzbal is not required. If the store owner did not yet calculate the account of the customer then in this case [of store credit] the Shemitah year does not abolish the loan and a Peruzbal is not required.[4] If the store owner has calculated the account of the customer and the amount owed has already been written and prepared then some opinions[5] rule it is considered like a loan and thus the seller must make a Peruzbal.[6] Others[7] however rule that so long as a due date has not been set for the bill then it is not abolished by Shemitah and a Peruzbal is not required.[8]

 

B. No credit-Is a seller required to perform a Peruzbal in order to collect money that he is owed for a purchase?[9]

If the buyer does not have regular credit from the seller [as is common in all large shops today in which they do not let people hold accounts at the store and they rather must pay immediately] then the owed amount is abolished by Shemitah [and hence the seller must perform a Peruzbal in order to demand payment of the loan afterwards].[10]

 

Q&A

Must a Jewish company perform a Peruzbal for clients or customers that owe them money?[11]

Any bill issued by the company that is due before the end of the Shemitah year requires the billing company to make a Peruzbal if the company and clients are Jewish, in order to allow collection of the debt.

 

Must a Jewish company perform a Peruzbal for debts of clients or customers that have not yet been billed?[12]

If it is common for the company to extend credit to the customers, as is common with all utility companies [electric; water; phone; gas], then if the company did not yet calculate the amount owed by the customer then the Shemitah year does not abolish the loan and a Peruzbal is not required. If the calculation was done although the bill has not yet been issued then it is disputed as to whether a Peruzbal is required.

 

Must a Peruzbal be made by a Jewish owned credit card company?[13]

All the accounts that are not set to be billed until after R”H of the 8th year [such as all the credit cards used within the days before R”H] do not require a Peruzbal as their due date will not arrive until after Shemitah.

 

Must a Jewish landlord perform a Peruzbal to collect rent from Jewish tenants?

If the rent is only due after the end of Shemitah then a Peruzbal is not required. If the rent is due before Shemitah, and has not yet been paid, then he is required to perform a Peruzbal.

 

Does one with a bank account in a Jewish owned bank have to perform a Peruzbal?[14]

If the Jew has money in his account then he is required to perform a Peruzbal before Rosh Hashanah of Shemitah.[15]

 

Must a Jewish owned bank perform a Peruzbal to collect the money they are owed from clients?[16]

Yes.

 

If one was given a check that will not be cashed until after Shemitah is a Peruzbal required?[17]

No.[18]



[1] See Admur 39

[2] Admur ibid; Michaber 67/14

[3] The reason: The amount owed in this case is considered a loan and thus needs a Peruzbal as the seller can demand the money at any time. [ibid]

[4] Admur ibid “If the seller gives credit for one to two years, then the Shemitah year does not abolish this debt [and thus a Peruzbal is not required].”

The reason: The amount owed in this case is considered Hakafa [credit] and not a loan and thus he does not need a Peruzbal as the seller will not demand the money right away and it is thus similar to one who set a date for after the Shemitah. [ibid]

[5] Second opinion in Rama 67/14 and Admur ibid

[6] The reason: If the account was calculated before the end of the Shemitah year then it needs a Peruzbal being that the actual calculation turns the credit into a loan, even if the buyer can pay it back whenever he wants. However if it has not yet been calculated then it’s as if the buyer doesn’t yet owe the seller any money and thus doesn’t need a Peruzbal.

[7] First opinion in Rama ibid; Admur ibid

[8] The reason: According to this opinion it only turns from credit into a loan after the buyer is given a due date to pay it back. However until then it is considered credit and Shemitah does not abolish credit.

[9] Admur 39

[10] The reason: Upon the purchase the buyer was immediately obligated to pay the seller and the fact that the seller allowed him to take credit is considered as if he lent him the money in which case Shemitah abolishes the loan. [ibid] 

[11] Based on Admur ibid that the date arrived before the Shemitah year.

[12] Based on Admur ibid regarding credit

[13] Pashut; Nitei Gavriel 12 p. 94

[14] See Nitei Gavriel 12; Yechaveh Daas 4/64; Yabia Omer 10/3

[15] The reason: As the money in his account is considered money lent to the bank and thus requires a Peruzbal if the bank is Jewish owned.

[16] See Nitei Gavriel 12; Yechaveh Daas 4/64; Yabia Omer 10/3

[17] Igros Moshe Choshen Mishpat 2/15; Shevet Halevy 9/291; Minchas Shlomo 3/134-19; see Nitei Gavriel 12/8

[18] The reason: If the check is postdated until after Shemitah then it is considered not due until that time. Furthermore a check is considered like actual payment and hence it no longer has a status of “do not collect the money” [“Lo Yigosh”] [Igros Moshe ibid]

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