As we have explained last week, one of the 613 Mitzvot of the Torah is lending money, without interest, to a fellow Jew who needs it (Shemot 22, 24). Helping a needy person through a free loan is the highest form of Tzedaka. However, harassing a needy person into paying back the loan when one knows he/she lacks the money at the moment, is a very grave transgression which is explicitly forbidden in the Torah.
ILLUSTRATION: David, knowing that Josh's business is in the verge of insolvency, offers to lend him the $10k needed to keep afloat. "You'll pay me when things get better again" said David to Josh.
David has just fulfilled a great Mitzva. Not only did David help a fellow Jew financially, but he did this without affecting Josh's dignity. In fact, he prevented Josh from getting to the point that he would need to ask for financial help.
As long as David knows that Josh cannot yet repay the loan, he is forbidden from harassing Josh. The Halakha is that David cannot even "inadvertently" pass by Josh's place in order to remind him of the loan, if David knows that Josh doesn't yet have the money.
On the other hand, Josh is forbidden from withholding payment longer than necessary. In other words, if Josh does have the money, it is forbidden for him to unduly delay paying back David.
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Rabbi Yosef Bitton. YMJC 130 Steamboat Rd. Great Neck NY 11024