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Hilchos Choshen Mishpat

Volume IV : Number 5

Shemitah of Debts


Question:

What steps should one take so that Shevi'is (the seventh year of the Shemitah cycle) does not cancel any debts that are owed to him, and why was a "Pruzbul" instituted?


Answer:

  1. There is a Mitzvah incumbent upon every Jew to nullify at the end of the Shemitah year any debts owed to him ("Shemitas Kesafim"). There is also a negative prohibition that is violated if someone requests payment after Shemitah for loans initiated before the Shemitah year (1). This prohibition includes debts that result from monetary loans as well as debts that result from borrowing items that have been consumed, such as food, where the understanding is that the borrower will return an item of comparable quality and quantity (2).
  2. In our times, when the laws of Yovel [Jubilee] are not applicable, according to most Halachic authorities the Mitzvah of Shemittas Kesafim is Rabbinic. This Rabbinic Halacha that even when Yovel does not apply, Shemitah still removes old debts, was instituted so that these laws would not be forgotten from Israel. This Mitzvah applies in Israel and in the Diaspora, since it is an obligation dependent on the person (Gavrah) and not on the land (Adamah) (3).
  3. The removal of debts is effective at sunset of the 29th of Ellul of the Shemitah year (the very end of the year). It is therefore permitted for a lender to collect debts owed to him during the Shemitah year, whether the loan was made before or during the Shemitah year (4).
  4. If a borrower approaches a lender after the Shemitah year and wishes to repay his debt, the lender is obligated to say to him "I have removed myself from this debt, and you are no longer obligated to pay it". If the borrower says, "Even so, I wish to pay you!", the lender may take the money. This is because it is clear that once they have had this little conversation, the borrower is giving a gift to the lender, and not repaying a loan that has already been absolved (5).
  5. Although it is impossible to obligate the borrower to repay the lender after Shemitah, our Rabbis have said "One who returns a debt that Shevi'is has absolved him from - the Rabbis are very pleased with him!" (6)
  6. If the debt is not collectible until after Shemitah, (for example: a long term loan whose time for payment was set for a time that is after the seventh year), the debt is not absolved by Shemitah. Similarly, if someone sells merchandise on credit, or is owed back-pay for salary, and no specific time was designated for payment of the debt, it is not absolved by Shemitah (7).
  7. According to the Torah, a lender is permitted to give his debts to Bais Din to be collected by them on his behalf. If he does this, Bais Din may collect his debts for him even after Shemitah. The seventh year absolves a borrower only from private debts owed to an individual, and not debts that a Bais Din has been authorized to collect, as it says (Devarim 15:3) "...and from that which is yours with _your brother_ you should remove your hand." Similarly, if a person has been awarded a sum of money by a verdict in a Bais Din and has not yet been paid - Shevi'is does not absolve the defendant from such a debt, because this debt is considered as if it has already been collected, and is not considered by Halacha to be an outstanding loan (8).
  8. When the Jewish Nassi (leader) Hillel the Elder saw that lenders were refraining from lending to the poor because of concern that they would be unable to collect the debt before the end of Shemitah, he instituted that the Bais Din should write for lenders a contract called a "Pruzbul". Pruzbul translates to mean "a remedy for the good of the rich and the poor". This contract appoints the lender as an agent of Bais Din to collect his loan, and thus permits him to collect what is owed to him even after Shemitah.
  9. The structure of this remedy is to expand upon the concept of "giving over of debts to Bais Din", i.e. by having the lender declare in front of a Bais Din that he wishes them to take over his debts, without actually having to give them written contracts on those debts. This works even on loans which were enacted by verbal agreement, for which the lender has no written contract. The Bais Din then writes and executes the Pruzbul, as follows (9).
  10. The lender comes before three men who are Halachically worthy of being judges, and reads to them the following text as written in a document: "I, (Ploni*), give over before you (Ploni, Ploni, and Ploni) the judges, that any debts that are owed to me, I may collect through you at any time that I wish". The three judges, or any two people that witness this, then sign the document. The document should be dated with the correct date, if it is postdated it is invalid.

    Some are stringent to follow the opinion of the Rambam and the Shulchan Oruch, and do the Pruzbul procedure only in front of a Bais Din that has been authorized by the community to actually take money from some community members and give it to others (10).

  11. Rav Nachman (an Amoraic sage in the Talmud) added to the remedy of Hillel by declaring that it was sufficient for the lender to read the text of the Pruzbul in front of the Bais Din, and it is unnecessary for the Bais Din to actually put it in writing and sign it. The Rema states that this is the Halacha. According to this, a lender merely needs to read the above quoted text in front of three people who are fit to be judges before the end of the Shemitah year (11).

    Additionally, it is possible to declare in front of two witnesses that he is giving his debts to a specific Bais Din in a specific place, so that he can collect his debts after Shemitah through that Bais Din. This is effective even if the judges on that Bais Din are unaware that the lender has given them the authority to collect his debts.

    However, even according to the Rema it is preferable to actually write and notarize the Pruzbul with the signature of the judges, and not to rely on a mere verbal declaration.

    The opinion of the Rosh is that the prohibition to claim a loan from a borrower actually starts at the beginning of the Shemitah year, and the Pruzbul must therefore be written _before_ the _start_ of the Shemitah year. Therefore, some have the custom to go through the Pruzbul procedure on the eve of Rosh Hashana at the end of the sixth year.

    * [Ploni is a generic Biblical term that represents a person's name]

Sources:

(1) The Mitzvos and negative prohibitions involved in the Shemitah of debts are stated in Devarim 15:2. See also the Rambam, Hilchos Shemitah V'Yovel 9:1.

(2) See the commentary of the Melaches Shlomo on the Mishna in Tractate Shevi'is 10:2, and the Ben Ish Chai, Parshas Ki Savo.

(3) The fact that Shemitah of debts is a Rabbinic requirement even today and even outside of Israel is stated in the Rambam (ibid.), and is the conclusion of our great Poskim. In a case of dire need, i.e. if someone forgot to make a Pruzbul and is owed a very large amount of money, a competent Rabbi should be consulted.

(4) Shulchan Oruch, Choshen Mishpat 67:30.

(5) Shulchan Oruch, Choshen Mishpat 67:36.

(6) Rambam, Hilchos Shemitah 9:28.

(7) Shulchan Oruch, Choshen Mishpat 67:10,14,15.

(8) Pruzbul is discussed in the Gemara in Gittin (32b and 36a), in the Rambam, Hilchos Shemitah 9:16, in the Shulchan Oruch, Choshen Mishpat 67:11, and in the SM"A there 22.

(9) Rema, Choshen Mishpat 67:19, and the SM"A there 24, 38, and 39.

(10) Rambam there (17-18), and the Shulchan Oruch there (18-19). See the Rema in Choshen Mishpat 3:1, and the SM"A there (2) for a discussion as to what type of Bais Din qualifies as one that may judge financial issues.

It is important to note that, an additional requirement for Pruzbul is that the borrower own real estate, even if the lender only gives him a bit so that the Pruzbul will be effective, as stated in the Shulchan Oruch there 22-24.

(11) Rema there (20), and SM"A there (22).

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This week's class is based on a column by Rabbi Tzvi Shpitz, who is an Av Bet Din and Rosh Kollel in the Ramot neighborhood of Jerusalem. His column originally appears in Hebrew in Toda'ah, a weekly publication in Jerusalem. It has been translated and reprinted here with his permission and approval. His columns have recently been compiled and published in a three volume work called Mishpetei HaTorah, which should be available from your local Sefarim store.

Feedback is appreciated! It can be sent toatendler@torah.org.


This week's class is based on a column by Rabbi Tzvi Shpitz, who is an AvBais Din and Rosh Kollel in the Ramot neighborhood of Jerusalem. HisColumn originally appears in Hebrew in Toda'ah, a weekly publication inJerusalem. It has been translated and reprinted here with his permission and approval.

We hope you find this class informative and stimulating! If you do not see a subscription form to the left of the screen, access the Advanced Learning Network to subscribe to Business-Halacha.

For information on subscriptions, archives, and other Project Genesisclasses, send mail to learn@torah.org for an automated reply. Forsubscription assistance, send mail to gabbai@torah.org.

Please Note: The purpose of this column is to make people aware of Choshen Mishpat situations that can arise at any time, and the Halachic concepts that may be used to resolve them. Each individual situation must be resolved by an objective, competent Bais Din (or Rabbinic Arbitrator) in the presence of all parties involved!

 






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