As the sabbatical year comes to a close, those who wish their loans to be unaffected by a general rabbinic* cancellation should fill out a Pruzbul document and file it properly.** Here is a link to the Beth Din of America's Pruzbul document: link (PDF). It includes the following instructions:
- At the end of the seventh year of the Sh’mitah cycle, all loans are nullified, including credit agreements and wage agreements that have been converted to loan agreements. (As the guidelines regarding rental agreements that have been converted to loan agreements are complex, it is best to make a Pruzbul in such cases.)
- One who wishes to collects his loans after the Sh’mitah year must make a Pruzbul before the time that the loans are nullified (i.e. the end of the Sh’mitah year). Typically, this is done during the month of Elul.
- Attached are two alternative Pruzbul forms in both Hebrew and English.
The lender asks three men to sit as judges on a Beit Din. (The individuals must be Torah observant men who are not related to one another, to the lender or to the borrower.) The lender declares before them: “I submit to you judges in this place all of the loans that I have outstanding, and I therefore may collect these loans at any time that I desire.” The lender then fills in the Pruzbul form attached as evidence that he made a Pruzbul.
The lender asks two men to serve as witnesses. (The individuals must be Torah observant men who are not related to one another, to the lender or to the borrower.) The lender declares before them: “You are my witnesses that I am submitting all of the loans that I have outstanding to the Beth Din of America in New York, comprised of Rabbi Gedalia Dov Schwartz, Rabbi Mordechai Willig and Rabbi Shlomo Weissmann, and I therefore may collect these loans at any time that I desire.” The lender then fills in the Pruzbul form attached as evidence that he made a Pruzbul, and sends the form to the Beth Din of America.
- One may make one Pruzbul for all of the loans past due that he has extended. Therefore, the name of the borrower is omitted from the Pruzbul forms.
- The borrower must have (even through “sekhirut”) a lien on some amount of land on which the Pruzbul can attach a lien, even a small amount of land. If one suspects that the borrower has no land, the lender may “sell” land to the borrower from his own land. This is accomplished by one of the judges (or witnesses) handing a handkerchief to the lender by which all of the borrowers acquire a small amount of land from the lender.
- The date that the Pruzbul is written must be recorded. The Pruzbul is effective for all loans made before that date. If one makes a loan after the date of the Pruzbul, a new Pruzbul must be written for that loan. If the lender suspects that he will not find suitable judges for a new Pruzbul, he should lend the money and stipulate that he cannot collect the money until the Third of Tishrei which is after the completion of the seventh year.
- Both men and women are obligated to perform a Pruzbul. A married woman only needs to perform a Pruzbul if she has made loans with her separate assets.
- If one writes a Pruzbul and it gets lost, he does not have to write a new Pruzbul to replace the lost one.
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* The biblical cancellation of debts only applies when we observe the Jubilee year.
** If you forget to do this, consult your rabbi because there is room to allow collection of debts even without a Pruzbul.