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Rav Moshe Feinstein, z"l, is lenient with regard to allowing the loaning of money to a corporation because he maintains that the prohibition of ribis (usury) only applies where there is a shibud haguf (personal liability) not in corporate structures that protect their shareholders via limited liability. My understanding of Rav Moshe's reasoning is that the principle of ribis is only true where "eved loveh l'ish malveh" i.e. as long as he has not payed in full all the debt and interest, he can never be free. (Shibud haguf means even if he has payed him every penny he owns, if he ever [discounting shmittah] earns more money, he would have to give it to him as well.)

Assuming this reasoning is correct, shouldn't there never be a problem of ribis in the modern western world since modern bankruptcy laws also seem to preempt the very concept of shibud haguf by allowing for the possibility of anyone under sufficient financial distress setting a limit on what could ever be collected after which the borrower is forever off the hook without ever having payed up his incurred debt?

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    He didn't say shibud haguf, he said it only applies when there is a nogesh, a specific person pushing the borrower to pay him back. This applies to all lenders as they definitely pressure the borrower to pay them back. Also bankruptcy, as is insurance, does not change any laws of debt. Just like you can't smash my car just cause I have insurance, you can't choose to not pay a loan just cause the dept will be taken care of some other way. – user6591 Apr 16 '15 at 1:00

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