Q: I run a debt-purchasing agency, buying delinquent loans and collecting them. What are the halachic issues involved with this?

A: There are three main halachic concerns: the prohibition of “lo tih’yeh lo k’nosheh” (do not be an [oppressive] creditor), ribbis (interest), and litigation in secular courts.

1. A creditor is not allowed to pressure the borrower to repay when he knows that he is unable to. It is even prohibited for the creditor to present himself before the borrower, which will cause him shame (C.M. 97:2). However, this applies only if the creditor knows that the borrower is unable to pay; if he is unsure, he is permitted to demand the loan.

2. If the loan entailed prohibited ribbis and you bought the loan, you are not allowed to collect the interest. Moreover, even if the original loan was from a non-Jew to a Jew, you would not be allowed to collect any interest that accrued after you purchased the loan (Rama Y.D. 168:10). Your having an all-purpose heter iska would not help here, since it was not part of the original loan agreement.

3. If the debt is clearly owed, it is preferable, if possible, to get permission of beis din in order to litigate in secular courts.