A person who is owed money at the end of the Shemita (seventh, or "sabbatical") year may not collect these debts after the Shemita year unless he signs a Prozbol document before Rosh Hashanah. By signing this document, the individual declares that all debts owed to him are transferred to the authority of the Bet Din (Rabbinical court), and this allows him to collect the debts after Rosh Hashanah.
Generally speaking, Halacha requires signing the Prozbol document, and does not allow a person to merely announce the transfer of his debts to the Bet Din. It is insufficient for a person to make a verbal declaration to this effect, even if he does so in the presence of witnesses; he must sign the Prozbol document and thereby transfer his loans to the Bet Din.
Nevertheless, there is room for leniency in this regard under certain circumstances. Thus, for example, the Shulhan Aruch (Hoshen Mishpat 67:20) rules that Torah scholars are not required to write a Prozbol, and can instead simply declare in front of two witnesses that they transfer their loans to Bet Din. Furthermore, even laymen may make a verbal declaration in lieu of writing a Prozbol under extenuating circumstances. This would include a situation of one who wrote a Prozbol as required, but then lost the document at some point before Rosh Hashanah. Halacha does not require the individual to write a new Prozbol, and instead allows him to simply make a verbal declaration in the presence of two witnesses that he transfers his debts to Bet Din. Likewise, if a person arrives at the synagogue on Erev Rosh Hashanah, just before the onset of the holiday, and realizes that he had not written a Prozbol, it suffices for him to make a verbal declaration. He should approach two other people in the synagogue and declare in their presence that he transfers his loans to Bet Din, and this allows him to collect his debts after Rosh Hashanah, even though he did not write a Prozbol.
Summary: Generally speaking, one may not collect outstanding debts after the end of the Shemita year unless he had signed a Prozbol document before Rosh Hashanah. In certain situations, however, one may, instead of signing a Prozbol, verbally declare in the presence of two witnesses that he formally transfers his outstanding debts to Bet Din. This may be done by a Torah scholar, somebody who had signed a Prozbol but lost it before Rosh Hashanah, and somebody who realizes right before Rosh Hashanah that he had not written a Prozbol.
Visit www.iTorah.com to download the Prozbol form.
