According to Torah law, a person who lent money to somebody before Shemita (the seventh, or "sabbatical," year) may not collect the debt after that year; the year of Shemita eliminates all debts.
While many people are quite familiar with the agricultural aspects of Shemita, the prohibition against farming during the Shemita year, fewer people are aware of the monetary implications of the Shemita year. The cancellation of debts applies both in Israel and in the Diaspora, and is not restricted to those who own farmland. All Jews are bound by the prohibition against collecting debts after the Shemita year.
It has become customary to write a special document called a "Prozbol" toward the end of the Shemita year in order to allow lenders to collect their debts after Shemita. In Talmudic times, the great sage Hillel observed that many wealthy Jews refused to lend money out of concern that the debt will not be repaid before Shemita, in which case they would lose the money. Hillel therefore enacted the concept of Prozbol, whereby a person signs a document transferring to the Bet Din all the debts owed to him. The law of "Shemitat Kesafim" (the remission of debts) applies only to individuals, and not to public bodies such as Bet Din. Hence, the transferred loan is unaffected by the Shemita year, and one may then act as the agent of Bet Din to collect his debts after Shemita.
It is therefore imperative that anybody who had lent money before the Shemita year signs a Prozbol document before Rosh Hashanah, in order that he be allowed to collect his debts after Rosh Hashanah. One who does not sign such a document may not collect his debts after Rosh Hashanah.
Summary: Anybody who had lent money before the Shemita year may not collect the debt after the Shemita year unless he signed the Prozbol document before Rosh Hashanah. This applies to all Jews, both in Israel and in the Diaspora.
Over the next few days, our Halachot will offer more in depth details as to which types of loans require a Prozbul and which do not.
Visit www.iTorah.com to download the Prozbul form.
