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I you received a GMACH loan, how much did you pay monthly?
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amother




Goldenrod


Post  Thu, Feb 07 2019, 5:53 pm
amother wrote:
So why do they continue to loan money for weddings? I know from experience that it's not easy to get a gemach loan, you have to have guarantors, etc and they want to see concrete proof that you will pay back. Why don't your relatives do that?


Of course they do that. But what happens when the time comes, and the funds aren't just there. Besides for chasing after the guarantors, who in many cases make themselves impossible to find, there aren't too many options.

This isn't a legal form of business. There isn't much recourse to chase after non-payers.
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amother




Gold


Post  Thu, Feb 07 2019, 5:54 pm
amother wrote:
I agree 1000%! I was just pointing out that this mindset is cultural.

The mentality is so ingrained that you won't make any of them see reason. Agreeing to reason would impact their education system, the way the kids are married off, and more. Basically, it would require a lifestyle change.

Hopefully it won't take too many scandals for this mentality to change. I am hoping OP will take my words to heart and reconsider her own approach. And maybe just maybe she will have a ripple effect on her family and friends.
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amother




Gold


Post  Thu, Feb 07 2019, 5:56 pm
amother wrote:
So why do they continue to loan money for weddings? I know from experience that it's not easy to get a gemach loan, you have to have guarantors, etc and they want to see concrete proof that you will pay back. Why don't your relatives do that?

Because even areivim aren't guaranteed. And because very often gemachim don't have the resources to hound someone for payment. And when the person raises his hands and says "ich hub nisht" they cannot take his house from him. They are not cut out for this.
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amother




Magenta


Post  Thu, Feb 07 2019, 5:58 pm
amother wrote:
Of course they do that. But what happens when the time comes, and the funds aren't just there. Besides for chasing after the guarantors, who in many cases make themselves impossible to find, there aren't too many options.

This isn't a legal form of business. There isn't much recourse to chase after non-payers.


Why isn't it a legal form of business? The lender has the borrower sign a promissory note, and the guarantors sign guarantees. No one is obligated to charge interest.

Now, if they don't bother to get people to sign, its a different story, but nothing to do with the legalities of the business.
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amother




Gold


Post  Thu, Feb 07 2019, 5:58 pm
amother wrote:
Of course they do that. But what happens when the time comes, and the funds aren't just there. Besides for chasing after the guarantors, who in many cases make themselves impossible to find, there aren't too many options.

This isn't a legal form of business. There isn't much recourse to chase after non-payers.

This.
We just lost not an insignificant amount of money in a gemach that closed. A relative lost a lot of money. This is after years and years of this gemach being considered the "better" one in town.
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amother




Gold


Post  Thu, Feb 07 2019, 5:59 pm
amother wrote:
Why isn't it a legal form of business? The lender has the borrower sign a promissory note, and the guarantors sign guarantees. No one is obligated to charge interest.

Now, if they don't bother to get people to sign, its a different story, but nothing to do with the legalities of the business.

And what should they do with this note? Go to bais din? A gemach doesn't have the resources to become a credit agency.
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amother




Amber


Post  Thu, Feb 07 2019, 6:01 pm
amother wrote:
Of course they do that. But what happens when the time comes, and the funds aren't just there. Besides for chasing after the guarantors, who in many cases make themselves impossible to find, there aren't too many options.

This isn't a legal form of business. There isn't much recourse to chase after non-payers.


Unsecured loans in general are very hard to collect. That's why credit cards charge such high interest rates. And according to NBC news, nearly 40 percent of borrowers are expected to default on their student loans by 2023. So much for taking out loans for "education".

Loans in general are hard to collect, even the "legal" kinds. Not related to the purpose of the loan.
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amother




Amber


Post  Thu, Feb 07 2019, 6:04 pm
amother wrote:
Because even areivim aren't guaranteed. And because very often gemachim don't have the resources to hound someone for payment. And when the person raises his hands and says "ich hub nisht" they cannot take his house from him. They are not cut out for this.


Again, if they don't feel that chasunahs are a legitimate reason to borrow from a gemach, then why do they do it? Why not make a rule that they only lend money for down payments and education? Since that's obviously more important...

Gemachs can make whatever rules they want.
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out-of-towner




 
 
 


Post  Thu, Feb 07 2019, 6:17 pm
My husband runs a Hachnosas Kallah Gemach (he does not "own" it, he inherited the responsibility to run it and he answers to the Roshi Kehilla of the Kehilla it belongs to). He gives a maximum of $5000 for weddings, and people decide how much they can pay back per month but he tells me it's usually around $100-$200 a month. As this is a Kehilla based Gemach, it's mostly for people who are local, and the Areivim need to be local, known people as well with few exceptions. It is a legally binding document as far as I understand.
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amother




Goldenrod


Post  Thu, Feb 07 2019, 6:19 pm
amother wrote:
Again, if they don't feel that chasunahs are a legitimate reason to borrow from a gemach, then why do they do it? Why not make a rule that they only lend money for down payments and education? Since that's obviously more important...

Gemachs can make whatever rules they want.


Education is of no importance in these communities (at least the ones I'm referring to) and their lifestyle and community set up is heavily dependent on their marriage system. Being able to buy your own house has no weight on the system. Hence; they'll do what it takes to keep the system going (until it will collapse on itself, or change will be forced upon them).
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amother




Gold


Post  Thu, Feb 07 2019, 6:21 pm
amother wrote:
Again, if they don't feel that chasunahs are a legitimate reason to borrow from a gemach, then why do they do it? Why not make a rule that they only lend money for down payments and education? Since that's obviously more important...

Gemachs can make whatever rules they want.

Guess what? Don't be surprised if that happens eventually. When a few too many gemachim close, the other ones learn. People also learn not to put their money into the gemach after being burned like this. Eventually this will not be able to go on. Our parents mostly didn't need to do this to marry us off. The Holocaust survivors typically had special mazel and bracha and their children were still mostly financially stable (lower standards, lower prices, etc.). It's the third generation that mostly cannot swing it. Binah actually had an article on this a couple of months ago. For most of us, this is not sustainable.
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amother




Goldenrod


Post  Thu, Feb 07 2019, 6:22 pm
out-of-towner wrote:
My husband runs a Hachnosas Kallah Gemach (he does not "own" it, he inherited the responsibility to run it and he answers to the Roshi Kehilla of the Kehilla it belongs to). He gives a maximum of $5000 for weddings, and people decide how much they can pay back per month but he tells me it's usually around $100-$200 a month. As this is a Kehilla based Gemach, it's mostly for people who are local, and the Areivim need to be local, known people as well with few exceptions. It is a legally binding document as far as I understand.


I doubt its legally binding in a court of law.
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amother




Gold


Post  Thu, Feb 07 2019, 6:24 pm
amother wrote:
I doubt its legally binding in a court of law.

And even if it is. Seriously. The gemach doesn't have the resources to go to court.
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amother




Gray


Post  Thu, Feb 07 2019, 6:26 pm
amother wrote:
Have close family members in this line of 'business'.


I always wondered at the business end of this. How do the gemachs afford their office space and staff?
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amother




Ecru


Post  Thu, Feb 07 2019, 6:27 pm
I donate to my local Gmach, not lend money to it.
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amother




Goldenrod


Post  Thu, Feb 07 2019, 6:27 pm
amother wrote:
And even if it is. Seriously. The gemach doesn't have the resources to go to court.


True. And that brings about the fact that there aren't really any serious consequences to defaulting on a Gmach loan.
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amother




Goldenrod


Post  Thu, Feb 07 2019, 6:31 pm
amother wrote:
I always wondered at the business end of this. How do the gemachs afford their office space and staff?


It really varies. Some are Kehilla gmach's, so the support comes from the Kehilla. A lot of gmachs are run by volunteers, who either do it for segulah or l'ilulu nishmas someone. Some office spaces are 'donated' by businessmen who allow the use of their space after business hours.

Each gmach figures out its own logistics. There is no set way.
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amother




Ecru


Post  Thu, Feb 07 2019, 6:31 pm
amother wrote:
Of course they do that. But what happens when the time comes, and the funds aren't just there. Besides for chasing after the guarantors, who in many cases make themselves impossible to find, there aren't too many options.

This isn't a legal form of business. There isn't much recourse to chase after non-payers.


What is the business?
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amother




Gold


Post  Thu, Feb 07 2019, 6:33 pm
amother wrote:
I donate to my local Gmach, not lend money to it.

Good for you! Really, the zechus is enormous.

However, the way gemachim work for most people is like a bank. You put in your money , which they lend to people who need, and you can take back out your money when you need it, because people are constantly paying back on previous loans and depositing more money.
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amother




Ecru


Post  Thu, Feb 07 2019, 6:47 pm
amother wrote:
Good for you! Really, the zechus is enormous.

However, the way gemachim work for most people is like a bank. You put in your money , which they lend to people who need, and you can take back out your money when you need it, because people are constantly paying back on previous loans and depositing more money.


I get that. Its very nice. I don't think I could stomach the risk.
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