Every day, Sam Helfenbaum finds himself confronted with a scenario even a hardened Mossad agent would shy away from: What do you do when an impoverished 85-year-old shows up to apply for a free loan and brings along a fellow impoverished 85-year-old as co-signer?
“If the loan guarantor has to be pursued, what are we going to do, sue him?” bemoaned the executive director of Toronto’s Jewish Free Loan Cassa.
“Imagine the publicity we’d get from that. This population needs to be helped. They want to live on their own, their incomes are depleted and I don’t know what the solution for that is.”
Helfenbaum’s quandary resonated with the audience of several dozen fellow free-loan professionals and devoted volunteers at this week’s International Association of Hebrew Free Loans conference in San Francisco.
The seminars Sunday, Sept. 25, through Tuesday, Sept. 27, allowed free loaners to brainstorm and, most of all, talk shop and see what worked and what didn’t for their colleagues across North America and from as far away as Argentina.
The officials represented organizations, some of them well over a century old, that provide interest-free loans to Jewish entrepreneurs, students and others.
Typical of the proceedings was this exchange: When a Texan noted that running a credit check on a potential borrower was a “waste of $16,” gasps enveloped the room.
“You pay $16 for a credit check?” asked one representative.
“We pay a flat fee monthly, and if they go over our limit, they’re like a quarter apiece,” added another.
“That’s way, way too much,” added a third.
The Texan jotted down a few notes. Point well taken.
The subject Helfenbaum and colleagues Ariella Lowenstein of Los Angeles and Leonard Petlakh of New York addressed, specifically, was how to cope with Jewish poverty. But, unlike how to obtain affordable credit reports, the answers are not always so easy to pinpoint.
Poor Jews aren’t clustered in slum neighborhoods or housing projects. Oftentimes, they’re former middle-class professionals who have fallen upon hard times following a job or medical crisis. Many times, they’re still living in their own homes but are now unable to pay the bills or fill the refrigerator.
The free-loan model is ill-suited to aid the chronic poor, especially those on fixed incomes and without children to support them, admitted Petlakh. The model was conceived to provide a shot in the arm to aid someone suddenly facing a short-term hardship. Petlakh also finds himself in a difficult situation back home in the Big Apple, where he says there is a substantial, fervently religious population whose poverty is, in some cases, “self-inflicted” by having huge families while holding down minimal-paying employment.
In addition to brainstorming on how to help the needy, the free-loaners strategized how to keep from getting caught holding the bag.
If a borrower declares bankruptcy, noted one attendee, it is prohibited to contact the co-signers, as, in theory, they will then hassle the borrower. When combined with a four-year statute of limitations for contacting co-signers, this can be a problem.
Or not.
Noted Glen Gopman of Miami, “If you get a deadbeat to give you 10 bucks, that statute of limitations resets.”
And as Los Angeles’ Lowenstein admitted, many borrowers and co-signers will pay up even after the statute has lapsed.
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