The article examines the relationship between low socioeconomic status and going into debt in general, and debt in execution in particular. The data show that in general society there is a high and negative correlation between socioeconomic status and the rate of debtors and the rate of debtors to execution – a relationship that is two-way, since poverty (a difficult economic situation) is the main cause of going into debt, and debt deepens poverty and makes it difficult to escape it. In addition, debts impair all areas of life, and the debtor’s ability to cope with day-to-day difficulties, including debts. However, when it comes to Haredi society, this connection does not exist. In Haredi society, about half of which is poor and about seventy percent of whom belong to a lower economic class, the percentage of those with low debt is low. Likewise, in Haredi localities belonging to a particularly low socioeconomic cluster, the rate of execution debtors is very low and similar to the rate that exists, in the general population, in localities in the higher clusters.
The relatively low rate of debtors in Haredi society explains that while poverty in general society is the result of barriers and failures, in Haredi society the low level of income and poverty is the result of conscious and informed choices (from the Haredi point of view) in a lifestyle reflected in poverty, but on the other hand also with high benefits in accordance with the unique welfare function in this society. As such, many of them conduct themselves financially responsibly and adjust the level of expenses to income. In addition, the community structure of Haredi society is fertile ground for the establishment and development of organizations in various fields that also help maintain the economic balance, including: “Maternity Aid” organizations for assisting women after childbirth, various educational organizations for assisting struggling students, and financial aid organizations of various models (charitable charity in the form of grants and purchase vouchers, economic consulting, etc.), who help families from the lower segment of the population who are coping with financial difficulties.
This unique economic conduct is a significant factor that leads to the low percentage of debtors and portfolio holders in the Execution Office among Haredi society. In addition, it can be noted that even those who need a loan from this company have high access to cheap loans. As stated, these loans are provided from interest-free charitable funds with a convenient spread, the purpose of which is to make it easier for borrowers and enable them to live with dignity, while gradually repaying their debts. It is important to note that even if a debtor finds it difficult to meet loan payments, in many cases the charity system makes it possible to take out a loan in order to repay old debts (debt rollover). In the case of a debtor who does not meet the repayment of his loans, whether to individuals or to charitable organizations, the creditors turn to relevant channels in the community to help them do so, such as: Arabs and family members, the community’s rabbis and institutions, peer pressure from the community itself, Torah law and more. The dominance of the reluctance to turn to the authorities also affects this area, and constitutes another factor in the low rate of execution debtors.
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