The Sacred Shekel

Avodah
1

The following is from Rav Schwab on Chumash

Everyone passing by to be counted must give this half a
shekel based on the shekel of the Holy [Sanctuary,} where a
shekel is twenty geras. Half of such a shekel must be given
as a terumah-offering to Hashem. (Shemos 30:13)

Money obtained by a person who may have worked hard for it, but in the
process used forbidden tactics such as overcharging, withholding an
employee's wages, charging interest, doing business on Shabbos or Yorn
Tov, or engaging in various forms of dishonesty, is not completely his. He may have
only earned a part of his money, and he does not truly own the complete shekel.
When one offers a gift to Hashem, the shekel that he donates must be a
shekel of holiness. He must have honestly earned all twenty geras of that shekel, or
as we say in English, there should be "one hundred cents to the dollar." Not even one
penny should be missing from that dollar due to involvement in forbidden monetary
dealings. Jewish money must be -sacred shekels.

When one wishes to donate money for tzedakah or appropriate money for objects
to be used in the performance of mitzvos, one must be certain that every penny was
acquired honestly.

A man offered Rav Schwab a large donation. The Rav recalled that
this man had several years earlier declared bankruptcy, thereby avoiding
paying his creditors.

"Didn't you declare bankruptcy a few years ago?" he asked.
"Yes," the man replied.

"Well, what happened?"

"Thank G-d, I went to bankruptcy court and received a settlement," the
man responded. "I was able to restructure my business, and today I am
even wealthier than I was originally. I therefore wish to offer the Rav this
large donation for his yeshivah."

"You must use the money you wish to donate to pay back your
creditors," the Rav responded. "According to the Shulchan Aruch, there
is no such thing as declaring bankruptcy to free yourself from debt.
When a man owes money, he is obligated to return it. Otherwise, he is
considered a thief. Money that is to be given to tzedakah must be earned
in a kosher manner. Bankruptcy is not kosher."

Professor Yitzchok Levine

2

Money that is to be given to tzedakah must be earned
in a kosher manner. Bankruptcy is not kosher.”

It is perfectly legal.
דִּינָא דְּמַלְכוּתָא דִּינָא

3

I agree. This is precisely the sort of thing that Dina Demalchusa Dina *does* apply to; anyone who lends money does so in the knowledge and on the assumption that there is always the risk that the borrower will go bankrupt.

This is especially so when the loan is made to a limited liability corporation, with no personal guarantee by the proprietor; every lender knows, or ought to know, that the entire purpose of a corporation is to limit the proprietor's liability in case things go wrong ch"v.

The only exception would be if the lender and borrower are both frum Jews and they were both operating under the assumption that the loan would be subject only to Torah law and not to Dina Demalchusa. I think a beis din would rule that without an explicit agreement otherwise DDM still applies, but if the borrower knows in his heart that this was the assumption then midinei shomayim he would be required to repay it when he can.

4

From Avodah Vol 41, Issue 20

Money that is to be given to tzedakah must be earned
in a kosher manner. Bankruptcy is not kosher.?

It is perfectly legal.
*??? ??? ???*

Zev Sero wote:

I agree. This is precisely the sort of thing that Dina Demalchusa Dina
*does* apply to; anyone who lends money does so in the knowledge and on
the assumption that there is always the risk that the borrower will go
bankrupt.

One has to keep in mind that the approach of RSRH and his successors was total and complete honesty, even beyond what the halacha require. Rav Hirsch received a large dowry when he married. However, he gave it all away to tzedakah, because his father-in-law was a banker, and he was concerned about rebus.

Rav Dr. Yosef Breuer wrote the essay Glatt Kosher, Glatt Yosher. See

https://aspaqlaria.aishdas.org/2006/03/21/rav-breuer-glatt-kosher-glatt-yoshor_21/

Rav Schwab was known as The Ish Ha' emes, see

https://docslib.org/doc/5784356/the-ish-haemes-rabbi-shimon-schwab

IMO, it is unfortunate that all Orthodox Jews do not have the same stringent standards as these rabbonim.

Professor Yitzchok Levine

5

Bankruptcy is not dishonest. It is a law that all modern governments have made, for a very good purpose, ("letakanat hamedina" which is one of the criteria the poskim use to determine what is a legitimate dina demalchusa), and effectively abolishing it among Jews would tend to undermine that purpose, so it's not necessarily a good standard even for midas chassidus.

The purpose of limited liability, in combination with bankruptcy law, is to encourage people to take risks in business, by assuring them that they will not thereby drive themselves into poverty, or at the worst such poverty will not become permanent. Demanding of Jews that out of midas chassidus we repay such loans that dina demalchusa has discharged will tend to discourage us from taking such loans, and thus from engaging in the economic ventures that the loans would finance, to the detriment of the country, which is precisely what the various legislatures wanted to avoid.

6

I want to make clear that my original posting had dina d’malchusa dina in Hebrew which came across as a series of question marks.
What I meant to add was that in Jewish law we have shemita which all debts are cancelled every seven years. That is even better than bankruptcy so I don’t understand how it can be said that there is something wrong with it.

7

Zev Sero wrote on 3/17/2023

Bankruptcy is not dishonest. It is a law that all modern governments
have made, for a very good purpose, ("letakanat hamedina" which is one
of the criteria the poskim use to determine what is a legitimate dina
demalchusa), and effectively abolishing it among Jews would tend to
undermine that purpose, so it's not necessarily a good standard even for
midas chassidus.

From https://www.torahmusings.com/2019/11/bankruptcy-in-halacha/

Bankruptcy in Halacha

The second element of American Bankruptcy is “fresh start,” which makes it unnecessary to make payments (“discharge”) beyond those prescribed by the bankruptcy court. Talmudic Halacha does not recognize fresh start. If someone originally lacks funds but acquires them later, he must pay past debts using new assets.

See the above URL for more.

This last paragraph is exactly what Rav Schwab told the man who now wanted to give a large donation to his yeshiva, namely, now that he has the money, he has to pay those to whom he owed money.

Professor Yitzchok Levine

8

Read the rest of the article. Talmudic halacha is not necessarily the operative law in this case. Dina Demalchusa is likely operative, and if so it is arguably (and I would so argue) not even midas chassidus to pay the discharged debts, unless there was a clear understanding between the parties that they would follow Dinei Yisrael and not Dina Demalchusa.