Circumventing biblical debt forgiveness: Who signs a prozbul?

Prozbul is a special legal arrangement disseminated by Hillel the Elder approximately 2,000 years ago. In this column, we’ll explain how this document works and who should sign it. 

 OUR CREDIT-BASED economies greatly complicate the picture. (photo credit: Towfiqu barbhuiya/Unsplash)
OUR CREDIT-BASED economies greatly complicate the picture.
(photo credit: Towfiqu barbhuiya/Unsplash)

Over the coming last week of the Jewish calendar year, there will be a big push for Jews around the world to sign a prozbul document. This is a special legal arrangement disseminated by Hillel the Elder approximately 2,000 years ago. In this column, we’ll explain how this document works and who should sign it. 

The Torah mandates that all loans should be canceled at the end of the shmita year. As the Torah commands, “All creditors shall remit the due that they claim from their fellow Israelites; they shall not claim the debt from their fellow Israelites or kin, for the remission proclaimed is from the Lord” (Deuteronomy 15:2).

“All creditors shall remit the due that they claim from their fellow Israelites; they shall not claim the debt from their fellow Israelites or kin, for the remission proclaimed is from the Lord.”

Deuteronomy 15:2

The obvious concern with this setup is that no one will want to lend money close to the sabbatical year. The Torah nonetheless demands not to close one’s heart to the needy: “Beware lest you harbor the base thought, The seventh year, the year of remission, is approaching, so that you are mean and give nothing to your needy kin – who will cry out to the Lord against you, and you will incur guilt” (ibid. 15:9). The Torah’s message seems to be clear: A just society requires the wealthier to lend money to the poor, at all costs.

How to make people lend money when all debts will be canceled

The Sages readily understood that they would need to strongly encourage all borrowers to nonetheless return their loans. For some, this meant granting a general blessing to those who returned their loans in spite of the upcoming shmita. Others went so far as to assert that we could forcibly compel borrowers to return their loans. Yet this uncertainty led many creditors to stop lending entirely. 

Given this nonideal situation, Hillel the Elder created the prozbul arrangement that would prevent loans from becoming automatically canceled. To capture the spirit of this decree, some later sages creatively suggested that the word is a combination of three Aramaic words, “Pruz buli ubuti,” which translates as “an advantage to the rich and the poor,” since the rich got their money back and the poor retained their credit line opportunities. 

 Just imagine a situation in which banks would have to forgive all debts (credit: Towfiqu barbhuiya/Unsplash) Just imagine a situation in which banks would have to forgive all debts (credit: Towfiqu barbhuiya/Unsplash)

“Prozbul” is clearly a Greek loan word that connoted the documentation of debts with the courts and public archives. This official record granted a lender a permanent lien against the debtor’s real estate and thereby protection should the debtor default.

In effect, this is what Hillel’s prozbul accomplishes: The creditor legally hands over his bonds to the judges so that he can collect money owed to him when desired. By making this declaration, he essentially begins the process of collecting the loan, thereby preventing its cancellation at the end of the seventh year. (Originally, the debtor had to own property for a prozbul to create a lien, but this requirement was significantly watered down in the later Talmudic period.)

As one can imagine, there was great controversy regarding how Hillel had the authority to circumvent the biblical requirement of loan cancellation. Some medieval commentators asserted that Hillel was merely publicizing and making standard a legal mechanism that already existed. Others, however, asserted that this was an innovative enactment that was necessary to preserve the societal need for money loans. 

Not everyone endorsed the use of a prozbul.

The Babylonian sage Shmuel, for example, deemed it an affront to the rabbinic judges to take part in such an arrangement.

Yet as Rabbi Abraham Isaac Kook noted, Shmuel himself proclaimed other legal rulings that effectively prevented loans from becoming automatically canceled in most circumstances. For example, he asserted that a debt that is not subject to collection at the end of the sabbatical year (say, a 10-year loan) is not automatically canceled. Shmuel, in other words, solved the same problem but through different means. 

OVER THE centuries, most Jewish creditors did not sign a prozbul, even as they continued to collect their loans. This phenomenon bothered many rabbinic scholars, who struggled to explain the practice.

In the most recent issue of the journal Tradition (Summer 2022), I document the many explanations given for this curious historical phenomenon and offer my own explanation.

In recent generations, Jews have begun to sign a prozbul again, and I encourage everyone to do so this year.

One might assert that they have no need to sign a prozbul because they have not loaned anyone money. Yet our credit-based economies greatly complicate the picture because we are regularly owed money, in one form or another. For starters, some authorities believe that money owed for purchases or wages would be canceled by shmita. Others assert that money owed in an uncashed check, or to be paid by a bank to a savings account, may also be subject to shmita cancellation. Due to these uncertainties, we generally encourage all adults to sign a prozbul document, even if they have not issued a direct loan.

A prozbul may be signed before a bet din of three judges. While the Sephardi custom is to prefer a bet din of three senior rabbis, Ashkenazi practice is to utilize any group of three religious men. Alternatively, one may sign a prozbul in front of two witnesses (nonrelatives), declaring that you are transferring your loans to the care of a bet din. Some contemporary forms offer yet another alternative, in which the lender appoints an agent (shaliah) to write a prozbul on their behalf to a distinguished bet din. All three methods work, and one can readily find online and in synagogues different options for the prozbul document. ■

The writer is the director of the Halachic Organ Donor Society and postdoctoral fellow at Bar-Ilan University Law School. [email protected]