One who borrows money is, quite obviously, required to repay the debt. If a debtor dies before repaying his debts, and his children are still young, below the age of Bar Misva, the creditor may not collect the debt until the inheritors reach Bar Misva age. Even if he has a Shetar (contract) testifying to the loan, he may not collect at this point. The reason for this Halacha is that young children are likely unaware of their father’s financial affairs, and might therefore not know that the father had given a collateral to the creditor. A collateral can serve as repayment, or must be returned when the debt is repaid. This information might not be accessible to young inheritors, and therefore debt collection cannot be made in such a case until the inheritors reach the age of Bar Misva. This Halacha is codified in the Hoshen Mishpat section of the Shulhan Aruch (Siman 108).
The exception to this rule is a case where immediate collection of the debt works to the orphans’ benefit. For example, if the creditor agrees to give a discount on the debt payment if he receives it immediately, then the Bet Din (court) will transfer the agreed-upon sum from the estate to the creditor. Since it is in the orphans’ long-term benefit to repay the debt immediately, the Bet Din will mandate the immediate repayment. Similarly, if the loan was made on interest (in a manner that is permissible according to Halacha), then Bet Din will order the immediate repayment of the debt, so that the interest does not continue to accrue. In this case, too, the repayment is made immediately because this is to the orphans’ benefit, as it protects the estate from being depleted by the interest on the loan.
Summary: Generally speaking, when a debtor dies before repaying the debt, and he leaves only young orphans, the creditor cannot collect the debt until the orphans reach Bar Misva age. However, if the orphans will benefit from immediate repayment, such as if the creditor offers a discount in exchange for immediate repayment, or if the loan was made on interest, then the debt is paid immediately.
