Danny, already in his mid-40s, decided to move to Jerusalem, Israel and enroll in a yeshiva. Having never received an extensive Jewish education, he was overwhelmed by the large number of Torah laws that he was entirely unaware of. He was particularly intrigued by the agricultural laws of the Sabbatical year (“shemitah”), which apply this year (5775), and dedicated most of his energy to studying these laws. Then, he embarked on the study of the financial aspect of the Sabbatical year, namely, the cancellation of all debts with the conclusion of shemitah, with the onset of the new year on Rosh Hashanah. The cancellation can be averted by signing a special form called a Prozbol.
Danny panicked, as he had recalled collecting a loan of $50,000 after the last Sabbatical year some seven years ago. The loan was collected from his friend Stanley, and Danny was not in a financial position to return the sum. As he was then unaware of the laws of Shemitah, he had not prepared a Prozbol form to allow collecting the debt.
Danny and the yeshiva’s rabbinical staff consulted with our Bet Din to determine whether he needs to return the money to Stanley.
How Should the Bet Din Rule, and Why?
The Torah mandates that all loans be cancelled with the conclusion of the Sabbatical year (shemitah). Today, this requirement applies only by force of rabbinic enactment, as the Torah obligation does not apply in our state of exile. Accordingly, the Shulhan Aruch rules that a lender may not claim a loan any time after sunset on the eve of Rosh Hashanah following a shemitah year. This ruling applies to most types of loans, though it excludes instances in which a lender had previously received collateral from a borrower to secure the outstanding obligation. The rationale behind this ruling is that collection of collateral prior to the conclusion of the Sabbatical year is comparable to collection of the loan, and thus the loan is not considered outstanding with the conclusion of shemitah.
Hillel, one of the great sages of the Mishnaic period, observed that because of this mandate, people were growing reluctant to lend money as the Sabbatical year approached, fearing the inability to collect the debt prior to the time of cancellation. Since the decree was already reduced to a rabbinic restriction, he instituted a system to facilitate the collection of debts after shemitah in a halachically acceptable manner. In this system, which is known as Prozbol, creditors submit all loans to a rabbinical court, thereby authorizing the court to collect the debt. This effectively allows the creditor himself to collect the debt, since it is essentially the court, not the lender, who is demanding payment from the borrower. Additionally, a rabbinical court entrusted with the power of collection resembles collateral taken against a loan, and thus we may view the loan as having already been collected before the cancellation date.
The lender does not have to appear before a rabbinical court to submit the debts owed to him; it suffices to fill out a Prozbol form in the presence of two witnesses who are not related to each other or to the lender. As the Prozbol is effective only for loans extended prior to its signing, it is customary to fill out the form shortly before the time of cancellation.
It should be noted that outstanding loans are cancelled with the conclusion of the Sabbatical year only if they were already due. If the due date for repayment is after the conclusion of shemitah, the loan is not cancelled and a Prozbol form is
Interestingly, contemporary halachic authorities rule leniently in cases of individuals who were not religiously observant and thus did not complete a Prozbol form before the end of shemitah. Hence, if a person collected loans that were cancelled due to the Sabbatical year, and later he became religiously observant and learned of this prohibition, he does not have to return the funds to the borrower. The rationale behind this ruling lies beyond the scope of this article.
A Prozbol form following Sephardic tradition is provided here for the benefit of our readers. As mentioned, the form simply needs to be signed by two witnesses; one need not contact or submit the form to a Bet Din. It is acceptable to make use of a Prozbol prepared by any recognized Bet Din, even if the Bet Din is located outside of one’s area. Renowned sages of Syria would customarily complete a Prozbol prepared by the rabbinical courts of Israel.
SeeHazon Ovadia – Prozbol.
Verdict:The Time Is Right
Our Bet Din ruled that Danny was permitted to withhold the $50,000 he collected from Stanley. Danny was not required to prepare a Prozbol prior to last year’s Sabbatical year, because only loans that have passed their due date are cancelled with the conclusion of the Sabbatical year. Since the loan extended to Stanley was only payable after the Sabbatical year, it was not cancelled, and a Prozbol was not needed. Danny likewise did not have to return the other smaller loans which he had collected from borrowers, because at the time he was not religiously observant, and was thus unaware of these laws. As mentioned, leading halachic authorities permit keeping the collected funds in such a case. Obviously, now that Danny is an observant Jew, he is required to prepare a Prozbol for the upcoming cancellation date. If he fails to do so, his loans that were already due will be cancelled upon sunset the eve of this Rosh Hashanah.