Q: I lent my neighbor money. He honestly does not have money to repay me, but he has a house, a car, furniture and clothing. Is he obligated to sell personal assets to repay the loan?

A: In principle, a person is required to repay his loan even from personal assets. Similarly, beis din can collect these assets or sell them to enforce payment.

However, the Torah teaches (regarding a person who pledged to the Temple) that we allow the person to retain a certain minimum amount for his own support. This is known in halacha as siddur nechasim. We allow a borrower, similarly, an amount to cover his own food for a month, clothing for a year, and basic household furniture. We also allow him to retain two of each of his professional tools. This would include his car, if integral to his profession (C.M. 97:23).

A person is also obligated to sell his house in order to repay his loan, even if the loan is relatively small compared to the value of the house (Shach 97:14; Rama 104:3). However, if he can rent the house, he might not be required to sell it, but can repay from the rental income (Pischei Choshen, Halva’ah 2:22).