Prozbul doesn’t help unless the borrower has land. Even if it’s a minimal amount, it’s sufficient. Even if he only has a pot with a whole in the bottom [thus connecting its dirt to the ground], it is sufficient. Even if the borrower has nothing, but the cosigner or someone who owes this borrower money [does], that also helps. And if they also do not have anything, if the lender has a minimal amount of land, he could give rights to it to the borrower, even through another party and not before the borrrwer, and the pruzbol would help.
A prozbul does not retire [at the end of the shemittah year].
And what is a prozbul?
The lender goes to three Torah observant men that they should be a beis din, and he says to them, “You, the judges, I give over to you every debt I have incumbent on so-and-so and so-and-so, that I may collect them any time that I wish.” And they write a prozbul for him with this text: “With us three sitting as one, so-and-so the lender came and said before us I give over to you etc…’” and the three sign on the bottom either referred to as judges or as witnesses. They can do this also at the end of the year, which is on erev Rosh haShanah before sunset. Some say, that they don’t have to specifically write the prozbul, it’s sufficient for him to say so before them. Even if there is no beis din in his location, he is allowed to say “I hand over my contracts to the beis din which is in such-and-such place.”
There is a law of prozbul missing from this description, wait for 180:16!
When a borrower comes to pay the lender a debt that the shemittah [already] passed on it, the lender should say to him, “I retire the debt, and you are already absolved [of any obligation] from me.” If the borrower says to him, “Even so, I want that you accept it from me”, it is permitted for the borrower to accept the money from him.
And [in this situation,] the borrower should not say “I am giving this to you because of my obligation”, rather he should say to him “These [monies] are mine, and as a gift, I am giving them to you.” The lender may put in personal effort and work so that they borrower would say to him that he is giving the money as a gift. But if he can not accomplish this, he should not take the money.
As we said, a primary purpose of the shemittah of loans is to prevent eternal hounding by the lender. Therefore, there is no problem if the money is given willingly. The only kind of finagling discussed here is in a case where the borrower comes on his own after the end of shemittah. He wants to repay the loan, so it’s not hounding him to accept it. However, he isn’t allowed to repay the loan, since there is no loan. Instead, you should try to get him to phrase it as a gift. If you can’t, then you may not accept the money.
Someone who comes [to collect] on the strength of [a claim by] a non-Jew, he is like a non-Jew. Therefore, if someone buys from a non-Jew a debt contract on a Jew, it does not retire [at shemitah] for the non-Jew could have collected on his contract forever.
Similarly, someone who cosigned to a non-Jew on behalf of a Jew, and the Jew didn’t pay, requiring the cosigner Jew to pay the non-Jew and collect from the non-Jew the contract on the borrower, the loan doesn’t retire. But if there was no contract, but he collected for his friend orally and now he had to pay [the loan] off for him to the non-Jew, he would not be obligated [after shemittah to repay the cosigner].
The seventh year does not retire loans except at its end. Therefore, someone who lends his friend money during the shemittah year itself, he can collect the entire year. And when the sun sets on erev Rosh haShanah, the obligation is lost.
In se’if 12, the contrast between having a contract and not having a contract appears to be as follows:
If the loan had a contract, then there is a piece of paper being handed from the non-Jew to the cosigner. That paper has value, the power to collect forever, since it was created for a loan involving a non-Jew.
If there was no contract, then effectively the lent the original borrower money when he paid the non-Jew on his behalf. This is then a second loan, one between two Jews, and thus shemittah applies.
Someone who sells some thing to his friend on credit, it is as though he lent the money, and [the implied loan] retires. However, a shopkeeper who sells to others on credit, and it isn’t his way to collect until it accumulates to some amount, [the tab] does not retire. However, if he stands over it like it’s a loan, which means he calculates the whole thing and writes in his notebook the running total, then it is like a loan and does get retired.
A workman’s pay is not retired. However, if he stands over him like it’s a loan, it does retire.
One concept of shemitas kesafim, the retirement of loans on the shemittah year, is to put a cap on how long someone can be hounded by his creditor. Therefore, the the lender doesn’t have the right to collect the loan yet, shemittah doesn’t terminate the lown. Similarly, a seller who uses credit but only mentions the tab when it gets to a certain size isn’t subject to shemittah, since a sale on credit isn’t fully a loan, and the ills shemittah is there to eliminate aren’t involved. Similarly most employees who wait for payday. However, if storeowner or worker makes a big deal about the credit each time an amount is added to it, then it is sufficiently like a loan in the very way that matters to qualify.
Someone who lend his friend and made with him the condition that the seventh year would not retire [anything] of his, even so [this loan] is retired. But if he made a condition with him that this particular debt would not be retired, even if this was during the shemittah year, [the year] doesn’t retire it. Similarly if he wrote in the contract a language of a deposit [rather than a loan], it does not retire.
If someone lend his friend for some number of years and the time of collection arrives after the shemittah, it is not retired, since he had no way to collect it before hand.
Spmeone who gives his debt over to court and says to them, “You collect for me my debt”, is does not retire.
Understanding the last clause of se’if 7 requires understanding the difference between piqadon (deposit) and halva’ah (borrowing). A deposit is not for the second party’s usage, he is appointed over it to guard it. A bank despot, where the bank is privately owned by Jews would be halva’ah, not piqadon. The bank does have the right to invest my money, as long as I can reach it when I need it. Which we saw already when discussing interest.
The law in 180:9 is the basis of pruzbul.
[However, in contrast to the loans in the previous halakhah,] someone who lends to his friend on a collateral, it does not undergo shemittah. But if he lent it with ground as collateral, there are diverse rulings.
A cosigner who paid the borrower, but before [the borrower] paid the lender the shemittah year began, [the loan still] undergoes shemittah [and the cosigner's money is returned].
Someone who must swear to his friend about money in a case where had he agreed with him [and there was no dispute about which to swear] the seventh year would have retired the money, it also retired the [need for an] oath.
Someone who was obligated to pay his friend money and denied it, and they stood for a judgment [in court] and he was found to be obligated, and the court wrote the ruling and handed it to the lender, the seventh year does not retire [the debt].
A little extra today because I missed yesterday.
By the way, if anyone prefers or dislikes this copious use of insertions compared to most of my QSA posts, please let me know.
The seventh year lays to rest every loan, whether loaned orally, whether loaned with a contract, and even if it is an item for which there is clear responsibility [e.g. land, immobile goods, or siginificant mobile ones, where the ownership is more obvious]. Someone who gave his friend money as a business investment, such that half is a loan and half is [retained but] leftin his charge, the half that is a loan is retired, but the half that is left in his charge is not.
Shemittas kesafim (the retirement of loans on the 7th year) is Torah law only when yovel (the jubilee year) is in practice, that is, when most Jews are living in Israel, and possibly even only if we’re back on the lands as divided by tribe. The Shulchan Arukh (CM 67:1), states that today this law is midivrei soferim, a rabbinic law endorsed by prophecy, a more binding sort of man-made leglislation. This appears to be the majority opinion, that it is rabbinic law. The Ramban (Seifer haZekhus) says it’s even Torahitic. On the other side, the Raavad says it’s a minhag chassidus, a practice of piety, not binding at all. The Rama (CM, ad loc) says that some say there is a custom not to practice this law at all, dating back to the days of the Rosh.
The question is understanding what the Rama is referring to — how can one have a custom to ignore a prohibition?
The Rosh himself explains that we started inserting an explicit clause in the loan that shemitah does not retire it.
The Gra says the custom is based on holding like the Raavad. The practice is an act of piety, and in Ashkenaz it became common not to follow it.
The Mahariq (shu”t #96) limits this custom to items that have acharyus nechasim. In contrast to what R’ Ganzfried writes here, the Mahariq rules that items which are clearly identifiable and don’t often change ownership were not included in the rabbinic legislation.
סִימָן קפ – הִלְכוֹת טוֹעֵן וְנִטְעָן וְעֵדוּת
181: Laws of Shemittah of Money
The majority of decors agree that the shemittah of money [the terminination of loans by the shemittah year, which is once every 7th year] is in practice even in these times, and even outside of the land [of Israel]. But the world got used to being lenient. The greats of Israel, whose memory is a blessing, already made much noise against this. Some of them tried to find a merit on the practice, that they are relying on the minority who are lenient. However, someone who wants to be careful with mitzvos is certainly obligated to act like the majority of decisors, whose memory is a blessing. In particular, it is possible to fix this with a pruzbul [a contract whose terms will be discussed later, whose terms place the loan outside of the law of shemittah] and he won’t [even] come to a loss.
The shemittah year was 5635, and the next one will be 5642. [For us, the previous was 5768, and the next one will be 5775.]
Currently, shemittah is once every seven years. Once the majority of the Jewish people settle Israel, perhaps only if we return to our tribal boarders, then yovel, the jubilee year comes into play, and shemittah shifts back from rabbinic to Torahitic law. At that time, the dispute as to whether the 50th, yoveil, year counts toward the shemittah cycle or not could perhaps change the date for the next shemittah from 5775.