As I discussed in a previous article, the mitzvah of shemittas kesafim comes into effect this year immediately before Rosh Hashanah. This law cancels all debts that someone is owed, meaning that the creditor cannot force collection.
Notwithstanding the mitzvah of shemittas kesafim, the Torah commands a lo sa’aseh, that states: “Be careful, lest (hishameir lecha pen) a wicked idea enter your heart, saying, ‘The seventh year, the year that releases, comes near’ and your eye disdains your brother, the pauper, and you fail to give him” (Devarim 15:9). Technically, the words “Be careful, lest” qualify as a mitzvas lo sa’aseh (Eiruvin 96a), although this mitzvah requires a positive action — to lend, notwithstanding the approaching deadline that will release the borrower from liability. This is in addition to the mitzvas aseih, the positive mitzvah, in effect at all times, to lend money whenever we are able.
Unfortunately, Jews violated both mitzvos and stopped lending money out of concern that they would not be repaid after the shemittah year. Since this violates a Torah law, Hillel felt the responsibility to create a system that allows loan collection, notwithstanding that shemittah has passed. The vehicle he created is called a pruzbul. The origin of this word is two Aramaic words that mean “benefit for the wealthy” (Gittin 36b). The Gemara notes that a pruzbul benefits both wealthy and poor – the wealthy, because it allows them to collect loans, and the poor, because they can now borrow money when needed.
To quote the two places where the Mishnah introduces pruzbul: “Hillel established the pruzbul as a tikun olam” (Gittin 34b). “A pruzbul is not released [by the shemittah year] — this is a takkanah established by Hillel the Elder, when he realized that people were refraining from lending money, and were thereby violating what the Torah commands, ‘Be careful lest…’ (Devarim 15:9), Hillel established the pruzbul (Shevi’is 10:3).”
How could he?
By what means could Hillel change the law that the Torah established? The Gemara (see Rashi) presents two options:
(1) The tanna,Rebbe, contends that shemittas kesafim applies min haTorah only when the laws of yoveil apply. Hillel held like Rebbe that shemittas kesafim is only a rabbinic rule today — since the mitzvos of yoveil do not apply until the tribes all return to their lands. Chazal have the ability to suspend rabbinically declared laws (Gittin 36a).
(2) The Torah provides batei din with the ability to declare property ownerless. This ability, called hefker beis din hefker, allowed Hillel to require borrowers to pay their debts that would otherwise have been released by the mitzvah of shemittas kesafim.
How did he?
How does a pruzbul work?
According to most rishonim, the technical way a pruzbul operates is as follows: Min haTorah, the prohibition of shemittas kesafim exists only when an individual demands payment, but not when a beis din does. This halacha is implied by the words in parshas Re’eih (Devarim 15:2): “Every creditor must release his hand from what his fellow owes him. He may not demand payment from his fellow or from his brother, because he has declared a release for Hashem.” These words teach that the prohibition of shemittas kesafim applies only to an individual, not to beis din (Sifrei). Thus, min haTorah, there is a relatively simple way to avoid violating the prohibition of shemittas kesafim. Before this law takes effect at the end of shemittah year, the creditor transfers his loans to beis din (Mishnah, Shevi’is 10:2; however, cf. Rashi, Gittin = and=, who appears to understand the topic differently), thereby authorizing the beis din to collect the debts. Now that the debts are in the hands of beis din, shemittas kesafim does not apply, and the debts can still be collected.
Min haTorah, this process requires the creditor to hand over his loan documents to the beis din. If the creditor does not have the documents, he does not give them to beis din, or the loans were not made in writing, the creditor cannot use this heter to avoid shemittas kesafim. The pruzbul allows the transfer of the debts to the beis din without physical movement of any documents, or even if there are no documents.
As the Yerushalmi expresses it, pruzbul allows transferring documents that a creditor has in Rome. (An alternative interpretation understands this passage of Yerushalmi to mean that a creditor in Israel may transfer his loans to a beis din in Rome, even though at the time of the Yerushalmi, PayPal had no business operation yet in either Israel or Italy. We will return to these two interpretations of the Yerushalmi.)
Thus, pruzbul works for loans created in the presence of witnesses, even when no written contract was drawn up (Rema, Choshen Mishpat 67:19 and Sma; see Urim).
We should note that, even without pruzbul, there are at least four ways whereby a creditor may avoid violating shemittas kesafim. Apparently, people were not utilizing these methods, and therefore Hillel created a simpler vehicle to avoid the prohibition. I will utilize an acronym BACK — whereby debts must still be paid BACK, notwithstanding the mitzvah of shemittas kesafim:
(1) Beis din
As explained above, the creditor delivers his loan documents to a beis din; collection of the debts is through beis din (Rambam, Hilchos Shevi’is 9:15; Rashi, Gittin 36a).
(2) After – payable after shemittah
Although this ruling is disputed in the Gemara, the accepted halacha is that shemittas kesafim applies only to a loan that could be collected, at least in theory, at the end of the shemittah year (Shulchan Aruch, Choshen Mishpat 67:10). Thus, a simple way for someone to lend money and avoid shemittas kesafim is to schedule the loan’s due date for after shemittah year (see Makkos 3b). Of course, by doing this, the creditor forfeits any right to collect the loan earlier. In addition, this suggestion will not help if the loan is overdue and the borrower has not been paying, whether his delay is because he is without funds or because he chooses to be a deadbeat.
There is a technical way that, when the loan is originated, it can be made conditional to be payable even after shemittah ends. Because of space considerations, I am unable to explain this in the current article.
You are correct, it should be collateralized, but I think that you’ll remember BACK better than BACC.
At the time of the loan, the creditor can insist on receiving collateral (a mashkon) [Gittin 37a] that is worth more than the loan. Some authorities contend that shemittas kesafim does not apply even if the mashkon is worth less than the loan (Shmuel in Yerushalmi, Shevi’is; Rashi, Bava Metzia 49a; Rash, Shevi’is 10:2, in his explanation of Shavuos 44b). These authorities hold that the existence of a mashkon automatically exempts a loan from the rules of shemittas kesafim. The reason why a mashkon exempts the loan from the mitzvah of shemittas kesafim is because the loan is considered already collected.
The Shulchan Aruch cites both of the opinions I quoted, but rules, according to the first opinion, that the mashkon preempts shemittas kesafim only when it is at least as valuable as the amount loaned (Choshen Mishpat 67:12).
Paying BACK (or BACC)
Now that we know about these four options, we realize that the creditor can easily arrange matters such that shemittas kesafim is avoided. Nevertheless, Hillel realized that people were not utilizing these methods to guarantee return of their funds, but instead, they were refraining from lending money — thus violating both an aseih and a lo sa’aseh. This necessitated the new takkanah of pruzbul.
What type of beis din?
As explained above, the legal vehicle whereby a pruzbul works is that the loan is transferred to a beis din, which avoids the prohibition of shemittas kesafim. The Mishnah (Shevi’is 10:4) states: “This declaration is the essence of a pruzbul: ‘I transfer to you, dayanim xxx of community y, any loan that I am owed, such that I can collect it whenever I want to.’”
We may have noticed that beis din is involved in the din of pruzbul in two ways:
(1) The Torah exempts loans owed to a beis din from the mitzvah of shemittas kesafim.
(2) Transferring the ownership of the debt to beis din may require utilizing the principle of hefker beis din hefker, which is a legal concept that requires a beis din to implement.
This brings up a new question (Gittin 36b). The Gemara states that a pruzbul can be created only by a high-level, established beis din, such as that of the renowned amora’im, Rav, Shmuel, Rav Ami or Rav Asi. Why can only these gedolei Yisroel create a pruzbul? Because the ability to declare someone’s property ownerless, hefker beis din hefker, is not granted to just any beis din (Sma 67:36).
Technically speaking, three learned, adult, male Jews can form a beis din. For laws such as hataras nedarim, releasing someone from vows, we follow this practice. Is the same type of beis din valid for creating a pruzbul? The Gemara quoted above disagrees — not every beis din may create a pruzbul, only one in the league of Rav, Shmuel, Rav Ami and Rav Asi. This implies that even a beis din experienced in dinei Torah may not issue a pruzbul. Several rishonim, including the Rambam and Rabbeinu Tam, conclude that only an exceptionally regarded beis din may issue a pruzbul. This is also the conclusion of the Shulchan Aruch: “A pruzbul may be written only in a prominent beis din, meaning, three experts who know halachic civil law, the laws of pruzbul and shemittah and were appointed judges by the community of their city” (Choshen Mishpat 67:18).
Nevertheless, the accepted practice among Ashkenazim follows the Rosh (Gittin 4:13), who understands that the Gemara later reevaluates this decision, and that is the conclusion of the Rema (Choshen Mishpat 67:18). Common contemporary Ashkenazic practice is that the three “dayanim” who perform hataras nedarim on erev Rosh Hashanah sign someone’s pruzbul.
From a distance?
May the creditor transfer the loans to the beis din without appearing before them, by declaring in front of witnesses, “I am transferring all loans that are owed me to beis din, consisting of dayan D1, dayan D2 and dayan D3, in city C?” If you follow the Ashkenazic practice that a pruzbul may be issued by any beis din, this question is not that serious, unless you intend to spend all of Elul outside any Jewish community. However, for those who follow the Shulchan Aruch’s ruling, this is a very practical concern, since a pruzbul may be issued only by a major beis din. Must the creditor appear in front of the beis din for them to issue a pruzbul, or is it sufficient that he declare in front of witnesses that he is transferring all debts he is owed to a major beis din?
The Mordechai (Gittin #380) cites this question as a dispute between himself and Rabbeinu Yechiel, in which Rabbeinu Yechiel required the declaration to be in the presence of the beis din, whereas the Mordechai ruled that it is adequate for the creditor to declare to the witnesses that he transfers his loans to the beis din. The Shulchan Aruch mentions both opinions (Choshen Mishpat 67:19 and 21), concluding (Choshen Mishpat 67:19) that he must make this declaration directly to the beis din, an approach accepted by both the Sma and the Tumim (67:21). The Rema (Choshen Mishpat 67:20) concludes that it works even if he is not in front of beis din.
Or, more accurately, remember the passage of the Yerushalmi (Shevi’is 10:2), regarding Rome! That Yerushalmi states that a pruzbul can transfer what is nesunin beRomi, “located in Rome.” If nesunin beRomi refers to the location of the dayanim, the creditor may transfer loans to a beis din hundreds of miles from where he is, as concluded by the Mordechai and the Rema. On the other hand, if the Yerushalmi is referring to loan documents in Rome, all we can prove is that pruzbul permits the transfer of loans, without the creditor handing his documents physically to the beis din.
One pruzbul covers all
A creditor need make only one pruzbul, regardless as to how many outstanding debts and debtors he has. This is because the pruzbul transfers all the loans he is owed to the beis din.
Must a pruzbul be written down, or can it be an oral declaration, without a written form? The Shulchan Aruch implies that, in normal circumstances, it should be a written document, whereas the Rema rules that it can be performed orally (Choshen Mishpat 67:20). Accepted custom is to make a pruzbul into a simple, written form, although the exact text may vary, often dependent on some of the halachic issues we have discussed in this article.
A pruzbul transfers to the beis din any outstanding debts that exist at the time that it is made. It cannot transfer a debt that does not yet exist. Therefore, if a creditor made a pruzbul on the 20th of Elul, and then loaned someone money on the 23rd, shemittas kesafim will take effect on this loan. As a result, a postdated pruzbul, such as one transacted on the 20th of Elul, but dated the 29th, is invalid, since it might be used as proof that a loan made between these two dates was transferred to beis din when it wasn’t (Mishnah, Shevi’is 10:5).
On the other hand, a predated pruzbul is perfectly valid. Dating it earlier than necessary only causes a potential loss to the creditor, since it cannot prove that he transferred to beis din a loan that took place after the date written on the pruzbul. Since the creditor would be harming only himself with such a pruzbul, a predated pruzbul is valid (Shulchan Aruch, Choshen Mishpat 67:32 and Sma there #54).
The Mishnah states that a pruzbul is written only when someone owns land (Shevi’is 10:6). Who must own land? The borrower must be someone who owns or has a right to some land.
However, this does not mean that a creditor cannot create a pruzbul to collect from someone who rents an apartment. A tenant has a right to his apartment, and this is adequate “land ownership” for a pruzbul to be effective. Even if the only land right a person has is that he has borrowed an area upon which his stove rests, he has enough “land ownership” to be included in a pruzbul.
Potential lenders solicited by someone homeless, who are concerned that a pruzbul will not guarantee their loan – be aware that Hillel took you into consideration, although the explanation as to how this pruzbul needs to be made is beyond the scope of this article. If you have loaned money to someone who has no rights to any landed property, ask your rav or posek how to make your pruzbul credit-worthy.
Why does a pruzbul work only if the debtor has land?
According to Rashi (Gittin 37a s.v. ela), this is because most people who borrow money have land to serve as understood collateral. Any serious loan will require some means of guaranteeing collection, and chattel can easily “disappear.” Therefore, a loan made for a borrower who has no real estate at all is so uncommon that Hillel felt no need to make a pruzbul to cover this situation.
The Rash (Shevi’is 10:6) offers a different suggestion why land ownership is an essential component for a pruzbul: A loan turned over to beis din is exempt from shemittas kesafim since it is as if beis din has already collected the debt — there is nothing preventing them from taking the land for collection.
Lost my pruzbul
The Mishnah (Kesubos 89a) implies that a creditor who comes to beis din after shemittah year and claims that he made a pruzbul must bring evidence that he did so. However, the Gemara (Gittin 37b) notes that the amora’im,Rav and Rav Nachman, followed the opinion of a different tanna, in a beraisa, who disagreed. Most rishonim accept their ruling that someone who claims to have made a pruzbul may collect his debt after shemittah (see also Shulchan Aruch, Choshen Mishpat 67:33). The reason is that we assume that a frum Jew would not violate the Torah when he can accomplish something in a permitted way (Sma 67:55). According to all authorities, the lender may not claim to have made a pruzbul if he did not, and it is theft to do so. It also violates the mitzvah of shemittas kesafim, releasing his loans at the end of shemittah year.
Why do people view loaning money as an optional “good deed” rather than as a commandment? The Chofetz Chayim (Ahavas Chesed 2:8) raises this question and mentions several excuses people make to avoid lending money. After listing these reasons, the Chofetz Chayim proceeds to refute each one of them. Simply put, the answer to this question is an old Yiddish expression, Ven kumt tzu gelt, es iz an andara velt, “When dealing with money, people approach matters in a completely different way,” and, if I might add my own commentary, often not in a very rational way. People find it difficult to part with their money, even temporarily. This is precisely why one receives such immense reward for lending. As Pirkei Avos teaches us, lefum tza’ara agra, “we are rewarded in direct relationship to the level of discomfort we feel when observing the mitzvah.”