Bankruptcy

[Donny]

BS"D

Dear Rabbis & Dr. Schulman,

I've accumulated an enormous amount of debts from my previous lifestyle, which I have since abandoned. How does filing Bankruptcy fit in with the Noahide laws? I know there are numerous mentions of how "bad" it is not to repay debts throughout the Torah and Psalms. One such example, Psalm 37 vs 21: " The wicked one borrows but repays not, while the righteous one is generous and gives." And there are quite a few Jewish laws pertaining to debts and business transactions. I'm curious as to the Noahide Laws view on this subject matter.

I also know that since it took some time to accumulate these debts, it will also take some time to pay them off. And I also know that HaShem, may His name be blessed, will provide for my needs. Bankruptcy is looking like a nice easy way out of most of these debts though.

Thanks for your answers in advance and have a great Purim,
Donny

[Director Michael]

Hi Donny,
Rabbi Moshe Weiner responded that as long as you follow the accepted system designed by the government which has secular legal jurisdiction, you are allowed to make use of that (bearing in mind all of its consequences), and declare legal bankruptcy.

I hope that everything works out OK for you in an openly revealed good way.

[bdschuh]

Michael and Rabbis,

If one borrows money and then declares bankruptcy, forcing the companies to forgive you for the debt, in the eyes of Hashem, do you still owe what you took? After one declares bankruptcy, it becomes increasingly difficult to pay.

thanks

[Director Michael]

As long as you follow the popularly accepted legal system for loans that are recognized as legally binding in a court of law, then in G-d's eyes there is no sin if you declare bankruptcy without committing any fraud in the process. The companies that loaned to you are aware of the laws of bankruptcy, and they choose to do business under those conditions. Certainly they take this into account when they set their interest rates and loan procedures.