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Wednesday, December 02, 2009

More on Gemach Loans

Don't pass over my second post on the age gap below, but I want to make sure this gets out there too, with thanks to "The Jewish Worker."

Wow! If this letter isn't eye opening, I don't know what will be. The idea of having this many bills to pay is simply mind boggling. I can only imagine the consumption of time. I manage clients with too much going on and this is far and beyond. This is simply ridiculous! A principal of good financial management is to keep things simple. We've opened up far too many accounts over the years and are trying to consolidate and par down where wise. Read these excerpts from this Mishapacha letter [emphasis mine]:

...When I began marrying off children, I saw no way over the fence except to take out gemach loans. ...I knew that the only way I could keep going was to continue to juggle loans. I"ve married off five children and have another six to go. I"m currently juggling about 45 gemachim. My days and nights are consumed with payback schedules deadlines and possibilities for other loan sources. For me it's to late to get out of the web. But it's not too late for others to not get sucked in.
Juggled to Death Jerusalem

Consumption debt does more than destroy a financial base, it can destroy one's time and ability to earn a living (a theme that Mesila has taken up in their newsletters). It is clearly time to acknowledge that some things simply aren't working. Let's hope that with the next 6 kids, they serve cake and punch to the neighbors instead of taking on more obligations to juggle. As any juggler knows, at a certain point the clubs can't be controlled and they hit you in the head.

18 comments:

Anonymous said...

I have heard of people juggling loans from three or four gemachim, but 45, that's absurd.

I hope that it was a typo and he meant to write 4-5.

JS said...

Classic case of killing a person with kindness. Here, the kind thing to do would have been to refuse to loan the money and send the person to debt counseling.

Maybe the problem could be mitigated by unifying the gemachs or just setting up a non-profit, no interest lender that includes financial counselors.

bluke said...

The letter states explicitly forty five, you can see the actual printed text now as well here http://jewishworker.blogspot.com/2009/12/are-s-bad-thing-ii.html

Anonymous said...

Time to get rid of all wedding events other than the ceremony itself (Sans the fancy gown, hair nails, gifts, etc.). Young people who care about their parents should simply elope. 4-5 hours of festivities is not worth the years and years of financial struggles and extraordinary stress.

Anonymous said...

they serve cake and punch to the neighbors

you know they wont...

so sad...everyone feels they have to maintain standards that the same "everyone" really cant afford. but these israelis (i think) have pretty simple weddings, its the obligation to buy an apartment that kills them.

Anonymous said...

I would suggest that we don't overuse gemachim in the MO U.S. world, but we have traded in our retirements and the retirements of our parents generation to maintain our lifestyles of consumption.

Also, sad, but different from these chareidim...

Selena said...

These debts are not coming from lavish parties, they are coming from the Charedi expectation to buy an apartment for the young couple.

Orthonomics said...

The parties aren't lavish, but beyond the means of these families.

"The Jewish Worker" had a post in the past from Mishpacha about the gifts given which do add to the problem. And you are 100% correct about the apartment.

Ariella said...

the simple piece of financial advice I linked to in my blog post, http://kallahmagazine.blogspot.com/2009/11/such-simple-truth.html
was "If you can't pay for it, don't buy it." This applies even if what you are buying is for the children you are marrying off. People who lose sight of that sink deeper and deeper into debt. If she hadn't borrowed, her children would have had to make do with less. They may have minded, but they would not have truly suffered the way she is suffering for years under mounds of debt. This is the absurdity of keeping up with the Schwartzes when they are living far beyond your means.

Charlie Hall said...

"If you can't pay for it, don't buy it."

Duh.

Or rather, it should be a "Duh".

Anyone who lends money to someone who can't pay it back is enabling someone else to sin, because we Jews are required to pay our debts!

This program has helped many:

http://www.debtorsanonymous.org

nancy said...

I liked the post. I read the excerpts.
Keep blogging!!

This is Nancy from Israeli Uncensored News

Mike S. said...

A gemach is a wonderful form of tzedakah for someone who has a temporary need. Say someone who exhausted his rainy day fund on a family emergency and then had his boiler go and needs $3000 to replace it. He can just repay the gemach before restocking the rainy day fund, and doesn't need to pay interest. Or someone who lost his job and is struggling to find another in a deep recession.

It isn't a good way to just live beyond your means; for example, to buy apartments you can't afford and will never be able to afford for your kids. And both the borrowers and the trustees who use or allow gemach funds to be used this way violate an issur d'oraita.

Zach Kessin said...

The way I see it is that we have the confulence of a few problems.

1) Haradi Society has very fixed expectations, variation is not permitted
2) A girl without a dowry can not get married (See #1)
3) 99% of Haradi society does not have the means to meet those expectations

So you have a perfect train wreck. It is impossible to live up to the expectations and trying will cause you to end up in the poor house.

A large part of this comes from the fact some people tried to engineer how society worked over the last generation or two and failed miserably. I think they thought that if they just wanted it badly enough they could build a perpetual motion machine and of course you can't.

Anonymous said...

Zach: I can't understand why a girl needs a dowry. I thought judaism values women and doesn't treat them like property. Besides, in charedi society, if anyone should require a dowry, it should be the male, particularly if he is not prepared to support his wife and family.

Anonymous said...

To Anonymous 6:46pm:
In the Haradi society it is expected that the woman's family is able to support the newly married couple (i.e. the dowry). If the woman's family does not have this ability, the woman is seen as less worthy.

EP said...

Sephardi Lady, I had an idea that I want to share with your readers. I read the entire Yated letter on gemachs online and I thought, this is just too pat. The crisis situation, the reference to rejecting Mesilah's help (not in your shortened version of the letter), the literary flair ("my days are consumed"), the subject something many have discussed and is considered a chareidi crisis - all supplied in dramatic, easy to digest form for a general readership. A complete cautionary tale with a moral, perfect for children and the trusting and naive frum readership. Sephardi Lady, this letter and another Yated letter you have written about, the young woman who wrote about the lavish lifestyle her parents financed til they lost all their money, and the dramatic last line - we'd do it differently raising our own children. It's now obvious to me, though it took me a while to cotton on. These letters are written by the editors of the Yated, to present a moral tale, a lesson, a dramatic story to prevent others from getting sucked in to the crisis. Letters are a dramatic feature, does anyone know about "Bintele Briefs" - the letters column of the early part of the 20th century in the Yiddish Forward, which presented the reader problems, often heartbreaking, of 100 years ago. Yated is in competition for readers with Hamodiya and needs to increase circulation, as its readership is hard pressed for money for a newspaper. (My family members in Lakewood can't afford Yated.) Reader letters present a sure fire thing - true life stories. Sephardi Lady, I know I tend to be skeptical by nature, but could you reread these two letters and let me know what you think? Aren't they written in the same dramatic style, with the same zinger last line?

EP said...

Sorry - the assumption of my comment was that both letters were from Yated, and I see one is from Mishpacha. I still think the editors are supplying dramatic flourishes! These letters are just too perfect.

Orthonomics said...

I often think the same thing as you regarding the style of writing. But it is the same throughout both major *Hamodia, Mishpacha, Yated, Jewish Press and more minor publications (e.g. the 5Town Jewish Times and Baltimore's Where What When).

The writing might be coming from elsewhere. The situations, I do believe, are real.