Rabbi Eliezer Melamed
Rabbi Eliezer MelamedPR photo

Towards the end of the Shmitta year, it is appropriate to clarify the mitzvah of shmittat kesafim and the ordinance of the pruzbul (according to what is explained in Peninei Halakha: Shevi’it and Yovel Chapter 6).

The Mitzvah of Loans

It is a mitzvah from the Torah to lend money to a person without interest when he is in need. This mitzvah is a branch of the mitzvah of tzedaka (charity). The loans that the Torah spoke of are mainly small, short-term loans for the purpose of buying basic necessities. And as our Sages said (Makkot 3:2): A typical, unspecified loan is for thirty days because until modern times, when people in modern countries learned to produce food and clothing and other household necessities in large quantities and cheaply, shortages were great, and people worked hard at jobs in order to get their family members bread to eat and clothes to wear.

And even though they worked for their livelihood, sometimes they were left without money because they had not yet finished their work, because they had not yet been paid, or because they could not find a buyer for their goods, and in order to buy food they had to ask for loans. They were not the poor who were unable to work, to whom the Torah commands to give tzedaka, but they needed a loan that would allow them to survive and tide them over until they received their wages, and the Torah commanded those who were able to do so, to grant them a loan without interest.

The Mitzvah to Lend to Trustworthy People Only

The mitzvah to lend is specifically to a trustworthy person, but when the applicant for the loan is known to be an untrustworthy person, there is no mitzvah to lend to him (SA, CM 97:4). On the contrary, one should refrain from lending to him, so that the mitzvah of the loan does not lead to conflicts surrounding the repayment of the loan. And if the untrustworthy person is poor and in great need, then the mitzvah is to help with smaller amounts as part of the mitzvah of tzedaka, but one should not give a loan.

Indeed, in every loan there is a certain risk, because even though the mitzvah is to lend to trustworthy people, there is always a certain fear that the borrower will run into unexpected difficulties, and despite his intention, will not be able to repay his debt, but we are commanded to enter into this risk in order to fulfill the mitzvah of lending.

The Mitzvah Shmittat Kesafim

The Torah commanded that at the end of the Shmitta year, all Israel should release the debts whose repayment time had arrived before the end of the Shmitta. And someone who violates this, and claims a debt after the release, cancels a positive mitzvah, and transgresses a negative mitzvah (Deuteronomy 15:1-3).

Unlike the shmittat perot (fruit), shmittat kesafim also applies in chutz l’aretz (abroad).

In addition to this, the Torah warned that we should not refrain from giving loans to trustworthy people close to Shmitta, even though if they fail to repay their debt by the end of Shmitta, we will have to write off the debt. And someone who transgresses and refrains from granting loans near Shmitta is considered a rasha (wicked), and will be punished for not agreeing to help his poor brother in his distress. And someone who fulfills the mitzvah of the loan even close to the Shmitta will be blessed, as it is said (Deuteronomy 15:10): “Give readily and have no regrets when you do so, for in return your God will bless you in all your efforts and in all your undertakings.”

A Mitzvah for Those Who Can Repay the Debt as a Gift

Since the mitzvah of shmittat kesafim is intended to help the poor, concerning a borrower who has the ability to repay his debt after Shmitta, even though according to the strict law he is exempt from paying back his loan because his debt has already been released, it is a mitzvah to repay it as a gift.

And if he took advantage of the release of the debt and did not pay, the Chachamim do not look favorably upon this, and he is considered a naval birshut ha’Torah (a lowlife taking advantage of the Torah’s permission) (Mishna Shivi’it 10:9; Peninei Halakha: Shivi’it 6:2). Therefore, it is not certain that the hiddur to give a loan at the end of the Shmitta in order to release it, is a correct hiddur.

The Solution for High Risk Loans

When trustworthy people were forced to ask for a large loan, and the risk they would be unable to repay it was substantial, the lender would require a ‘mashkon‘ (pledge) equivalent to the sum of the loan, or require land be mortgaged (“apotiki“) to guarantee the loan. In this manner, the lender assured repayment of his loan; even at the end of the Shmitta year, such a loan does not expire, since the debt is already considered to have been paid by means of the pledge, or the land.

When it was not possible to mortgage land or give a pledge for the repayment of the debt, but nevertheless, the borrower was trustworthy in the eyes of the lender, the lender would give the bill of debt to the Beit Din (Jewish court). In this manner as well, the debt does not expire at the end of Shmitta, as the Torah says (Deuteronomy 15:3): “But you must remit whatever is due you from your kin” – precisely debts in your possession you shall release, but debts in the hands of a court are not released.

The Ordinance of Pruzbul

At the end of the days of the Second Temple, many of the poor asked for loans and found it difficult to pay, and on the other hand, the rich refrained from giving loans to the poor before the year of Shmitta, for fear that they would not pay them back in time, and they would be released.

Therefore, Hillel the Elder proposed that they write a pruzbul, a legal device which, in effect, transfers a private debt to the Beit Din, so the debts would not be canceled at the end of Shmitta, and the rich would be able to continue lending to the poor near the end of Shmitta, without fearing that they would lose their money.

Indeed, if the Shmitta charge was from the Torah, it would not be possible to be satisfied with writing a pruzbul deed, but the debt would actually have to be handed over to the Beit Din, and the Beit Din would have to manage the collection of the debt itself; however, since the tribes of Reuben and Gad were exiled at the end of the days of the First Temple, the mitzvah of Shmitta from the Torah is null and void, and the obligation of Shmittah is from Divrei Chachamim (rabbinical), consequently, it was possible to amend that the delivery of the debts to the Beit Din would take place by writing a pruzbul deed only, without the Beit Din being actually involved in the collection of the debt (Peninei Halakha: Shivi’it 6, 5, footnote 7).

What was Released and What Wasn’t

Shmitta releases all types of loans, whether small or large, whether they were made orally, or written in a bill. Even if it is written in the deed that all the borrower’s assets will be guarantors for the repayment of the debt, at the end of the Shmitta, the debt is released.

Onlly if it is written in the deed that the payment of the debt will be from a certain piece of land, Shmitta does not release the debt, because it is considered to be outstanding, and stands from the land designated for it.

Funds that are deposited in a bank in a savings plan or in a keren hishtalmut (training fund) or pension fund are not considered a loan, rather an investment or deposit, and therefore are not released.

Wages that an employer has to pay an employee, or a buyer’s debt to the shopkeeper, are not released. However, if a debt has accumulated and the payment methods were agreed upon, the payment is considered a loan, and Shmitta releases it.

Loans given by a person to members of his family, such as parents or children or siblings, are also released. And even if it is a loan for the purpose of buying an apartment, as long as it is not written in the deed that the apartment is pledged to repay the debt – the debt is released.

Someone who lends milk or eggs to his friend, since the borrower does not return them themselves, but other milk and eggs, then this is like a loan that is released in Shmitta, provided that the borrower had to return the products before the end of the Shmitta year.

Even those who do not remember giving a loan, should write a shtar pruzbul, because it is possible that they gave a loan and forgot about it. In addition, there is a virtue in the writing of the pruzbul, for by doing so, one remembers the Shmitta year.

The Pruzbul Bill and its Laws

The pruzbul is a deed in which the lender hands the debt over to the Beit Din. There is no need to hand over the pruzbul bill to the judges physically. The main thing is for the lender to write in the pruzbul that he is handing over his debts to the Beit Din in a certain place, even if they are in another city.

In the pruzbul, a person submits all his loans to the Beit Din, therefore, one pruzbul is useful for all the loans he gave.

If spouses manage a joint account, one of them can sign a pruzbul for their joint account. And if they have separate accounts, it is necessary that the person signing the pruzbul explicitly states that it also includes the accounts of his or her spouse.

The pruzbul is useful for all loans granted up to the time of its signing, and not for loans that will be granted afterwards. Consequently, the pruzbul is written towards the end of the Shmitta year.

It is possible to hand over the pruzbul to any three rabbis, but le’chatchila (optimally) it is correct to hand over the pruzbul deed of debts to a Beit Din of recognized rabbis, from the local rabbinate, or from a recognized rabbinic body.

Our Sages have amended that the pruzbul will apply on the condition that the borrower or his wife has a right to some land. However, in practice, there is no need to be precise about this, because there is no person who does not have a right to some kind of land, since even those who rent an apartment or even received land on loan on which to place his bed, is considered to have land. Therefore, a girl who has a bed in her parents’ house, and a yeshiva boy who has a permanent bed (even a bunk bed), are considered to have land.

It is preferable that the two witnesses who sign the bill are kosher witnesses to testify, not relatives, but from the strict reading of the law, it can be those who are invalid to testify, and relatives, or women. This is because the collection of the debt is not done by the power of the witnesses, but by the power that the lender gave his loans to the Beit Din, and the signature of the witnesses is only there for the signature.

Since the writing of the pruzbul does not involve an enforcement of a law, it can be written at night.

It is possible to appoint a shaliach (emissary) to write the pruzbul.

The pruzbul should be kept until after the beginning of the year 5783 and no further, because the halakha is that if one says when he comes to collect his debt, “I had a pruzbul bill but it got lost”, he will be believed, and he will collect his debt.

This article appears in the ‘Besheva’ newspaper and was translated from Hebrew.