The Torah establishes in the Book of Debarim (15:2) the law of “Shemitat Kesafim,” whereby all debts are cancelled at the conclusion of the Shemita year. One who lent money before Shemita may not collect the debt after Shemita.
In order that potential lenders will not be discouraged from granting loans, the great sage Hillel enacted the provision of “Prozbul,” a document signed by the lender that transfers all outstanding loans to the Bet Din (Rabbinical Court). The law of “Shemitat Kesafim” does not apply to public institutions, and therefore debts owed to the court are not affected by the Shemita year.
As the current Shemita year of 5768 comes to a close, anyone who has lent money must execute a Prozbul document before Rosh Hashanah so that he may collect his debts thereafter.