Wednesday, September 24, 2014

Shemittah and Pruzbul

hemittah Loan Amnesty: Pruzbul

Questions and answers about the cancellation of debts on the Sabbatical year, and what we do about it

I understand that every seven years is a Sabbatical year, during which Israeli farmers give their fields a break and all debts are canceled. How does the debt thing work? What happens if someone owes me money? Am I really obligated to let it slide? Also, I’ve heard that there is something called a pruzbulthat somehow circumvents the law. What’s up with that?
Good question. Let’s start at the beginning. We read in the book of Deuteronomy:
This is the law of the Shemittah: to release the hand of every creditor from what he lent his friend; he shall not exact from his friend or his brother, because the time of the release for the L‑rd has arrived.1
This tells us that part of the observance of Shemittah (the Hebrew term for the Sabbatical year) is the forgiving of all loans. Any debts that are unpaid at the conclusion of the last day of the Shemittah year are canceled. Even if a borrower wishes to repay his debt, the lender may not accept it unless he reminds the borrower that the debt has been canceled, and the borrower still insists on giving him the money “as a gift.” (Indeed, it is considered praiseworthy for a borrower to do this.)
At the same time, the Torah forbids us to refrain from lending money for fear of Shemittah canceling the loan, and commands us to lend happily, despite the possibility that we may not be paid back.
In the words of the Torah:
Beware lest there be in your heart an unfaithful thought, saying, “The seventh year, the year of release is approaching,” and you will begrudge your needy brother and not give him . . . You shall surely give him, and your heart shall not be grieved when you give to him; for because of this the L‑rd, your G‑d, will bless you in all your work and in all your endeavors.2
So where does this leave the modern lender and borrower? How is someone supposed to lend money knowing that the debt will be wiped out in just a few years?
This problem has been around for over 2,000 years. Hillel saw that people were avoiding lending money as the Shemittah year nearedIn the first century BCE,Hillel the Elder saw that people were avoiding giving loans as the Shemittah year neared. This posed two problems: 1) The wealthy people were transgressing the Torah prohibition against withholding loans out of fear of Shemittah. 2) The poor people who desperately needed loans had no way to procure them. He came up with a novel solution.
Hillel noted that the Torah tells us that only private debts3 are canceled by Shemittah: “He shall not exact from his friend or his brother.” If, however, one owes the court (i.e., the community) money, Shemittah does not affect the loan. Based on this rule, he instituted the pruzbul: a mechanism by which debts are transferred to a beit din (religious court).4 By making a pruzbul, you make your private debts public—and therefore redeemable.5
Isn’t this a loophole devised to circumvent a divinely ordained law?
The Talmud6 explains that nowadays the Shemittah loan amnesty is no longer in effect according to biblical law.7 Thus, since the Shemittah that we observe today is a rabbinic injunction, Hillel was empowered to circumvent these laws due to pressing need.
When do I make a pruzbul?
Although loans are not canceled until the end of the Shemittah year, once the Shemittah year begins there are those who rule that a lender may not demand payment of a loan (although he may accept it without demurring if the borrower wishes to repay on his own). For this reason, many have the custom to make apruzbul before Rosh Hashanah immediately prior to the Shemittah year, to be able to collect payment throughout the Shemittah year. Once the pruzbul has been made, any additional loans will require an additional pruzbul.
Others simply make a pruzbul at the end of the seventh year, just before the loans are suspended. To cover all grounds, there are many—including Chabad—who make the pruzbul twice, once before the Shemittah year, and once again just before it concludes.
This year, the last day before Rosh Hashanah will be Wednesday, September 24, 2014, and you should have made your (first) pruzbul by then. If you did not, you can do so until the following Rosh Hashanah.
What do I need to do?
Here is the text of the pruzbul:
I give over to you [the beit din] all debts which I have, so that I may collect them any time I wish.
There are two ways to deliver the text to the court:
a) The simplest and most convenient way is to attend morning prayer services in your local synagogue on the day before Rosh Hashanah.Make your pruzbulonline After the services, a hatarat nedarim ceremony is conducted, during which each member of the congregation stands before a beit din consisting of three (or, in certain communities, ten) of his peers, and recites a vow annulment statement. (Click here for more on hatarat nedarim.) Immediately after finishing the hatarat nedarim, everyone recites the aforementioned pruzbul text, thus orally transmitting all debts to this ad hoc court.
b) If this is not an option, you can transmit your debts to a beit din in writing.Click here to make a pruzbul online.
What if I don’t owe any money?
Because of the uniqueness of the mitzvah of pruzbul, the Lubavitcher Rebbe, of righteous memory, encouraged everyone to make the effort to make a pruzbul. In fact, he suggested that even someone who has no collectable debts, and thus has no need for a pruzbul, should symbolically lend a small sum of money to someone else in order to be able to observe the rare and easy rabbinical institution of pruzbul.
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Deuteronomy 15:2.
Deuteronomy 15:9–10.
It is important to note that not all financial obligations are considered loans and subject to being canceled by Shemittah. In case of doubt, consult a halachic authority. See also footnote 5.
For technical reasons, the borrower must have in his possession some real estate in order for the pruzbul to take effect. A rental property, dorm room, or even a place to sleep in your parents’ home is sufficient for this purpose. In the event that the borrower does not have any real estate in his possession, the lender can “lend” him a tiny parcel of land for the moment. A rabbi should be consulted on how this should be done in a halachically acceptable manner.
According to the strict letter of the law, nowadays one can collect a debt even without the benefit of a pruzbul. The reason? “Since it has become the custom to collect debts, even without a pruzbul, after Shemittah, and the borrower is aware of this custom, it is as if the lender explicitly stipulated that the loan will never be canceled, even by Shemittah. In such an instance, the borrower has taken upon himself an obligation [with the knowledge that] the Torah does not require him to pay, and this is a valid stipulation.” Nevertheless, “Any G‑d-fearing individual should be stringent and make a pruzbul” (Shulchan Aruch Harav, Laws of Loans 35).

One should also consider that pruzbul is a unique and rare mitzvah—and one that is very simple to observe!
Gittin 36a.
For approximately the past 2,500 years, the agricultural Shemittah rules have not been in effect according to biblical law (seeDeserting the Farms for further explanation), and the rabbis deduced from scriptural nuance that all the laws of Shemittah are inextricably tied to each other. Thus, biblically, Shemittah’s loan amnesty is in effect only when its agricultural rules are observed.

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