“At the end of seven years you will make a release. And this is the manner of the release: 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 Lord has arrived.” (Deuteronomy 15:1–2)
The special commandments associated with the current Shmittah year apply not only to the seven-year agricultural cycle, but to financial transactions such as credit and loans as well. According to the Talmud, a central text of Rabbinic Judaism, the Messiah will come in the year following the Shmittah, so every aspect of observing the Shmittah year takes on special significance.
On the seventh of the cycle, farmers in Israel are required to let their fields lie fallow for a full year. In essence, they relinquish ownership of the land and anyone may enter the field to take the fruit that grows there. This is known as Shmittat karka, releasing the land, as is described in the book of Leviticus:
“For six years sow your fields, and for six years prune your vineyards and gather their crops. But in the seventh year the land is to have a year of sabbath rest, a sabbath to the LORD. Do not sow your fields or prune your vineyards. Do not reap what grows of itself or harvest the grapes of your untended vines. The land is to have a year of rest. Whatever the land yields during the sabbath year will be food for you- for yourself, your male and female servants, and the hired worker and temporary resident who live among you.” (Leviticus 25:3-6)
Less well known are the laws of Shmittah kesafim, referring to money and loans. This commandment waives all outstanding debts between debtors and creditors. Since it is a prohibition that limits the debtor as well as the creditor, even if the person who borrowed the money wants to repay the debt after it has been cancelled out by the Shmittah year, the lender may not accept it unless he states explicitly that the debt has already been cancelled.
If the borrower wishes to return the loan, he can present the money to the lender as a gift, unrelated to the cancelled loan. The Torah also forbids us to refrain from making loans before a Shmittah year. It should be noted that charging interest on a loan is, in any case and at any time, prohibited by Torah law.
The Talmud tells of how Hillel the Elder saw that rich people were refraining from making loans before Shmittah, and this was very hard on the people who needed the loans. He instituted a system by which the ownership of the loan is technically transferred to a Bet Din, a Jewish public court. Since only private loans were cancelled by Shmittah, and not public loans, this was a loophole that allowed the system of loans to continue. This process, involving a legal contract that is called a pruzbul, is permitted because the public need was great and because Shmittah in our times is only observed by Rabbinic injunction, not at the higher level of a Torah commandment.
Today, pruzbuls are still in use, but in addition, there are organizations that assist in the process of canceling debts. One such organization is Paamonim (“bells”). Paamonim began as an organization of volunteers giving financial advice to families and individuals with difficulties in budgeting. They now have over 2,700 volunteers meeting with families and helping them, sometimes on a weekly basis, to make ends meet. Paamonim also give workshops and advice on specific topics like retirement, resume writing, searching for jobs, bankruptcy, government offices, and taxes.
Paamonim feels that when the Torah commanded the people to waive debts and not to charge interest, it produced the benefit of allowing people to get out from under crippling debt. Without these mechanisms, debt becomes the master and people no longer serve God.
Uriel Lederberg, Director of Paamonim, spoke with Breaking Israel News about the organization’s Shmittah project. “This project is based on feelings of collective responsibility,” Lederberg explained. “The intention is not that the borrower can exploit Torah laws in order to avoid responsibility and get out of repaying his debts. Not at all! The correct intention is that we can enable him to open a new page, to take responsibility and move forward.”
The organization has developed a system in which donations are used to give interest-free loans to help consolidate debt. Paamonim acts as an advocate for the client, negotiating the debt and coming to terms with the creditor, much the same as in debt settlement process. They also negotiate with their client, who pays as much of the debt as he can. The difference is paid by a loan, which is forgiven as part of the process of Shmittah.
Paamonim, with its modern interpretation of a Biblical commandment, Shmittah, and a less mentioned aspect, pruzbul, are helping thousands of borrowers break free from the slavery of lenders.