This coming Jewish year (5782) is a Shemitah year. In a year of Shemitah, in addition to not working fields (in Israel), all debts are forgiven. Why is that? Wouldn’t this commandment just serve to make people hesitant to lend out money, knowing that the debtor could just run out the clock and have the debt canceled every seven years?


You make a good point. But before answering your question, let’s give some background on this unusual law.

The Torah1 commands us that every seventh year, starting from when the Jewish nation settled the land of Israel, is a Sabbatical (Shemitah) year, and, in addition to the agriculture laws,2 all personal loans are forgiven.

This law applies even outside of Israel, and only to personal loans, not public loans or debts incurred for other reasons (e.g., rent, purchase).

As you correctly intuited, at a certain point in history it does indeed seem that this law caused a hesitancy to lend out money close to the Shemitah year (more on that below). But, perhaps counterintuitively, this law was meant to evoke the opposite response.

Faith and Generosity

The classic 13th century work Sefer Hachinuch explains that forgiving our debts every seventh year trains us to become more generous. And letting go of money that is rightfully ours ingrains in our hearts a strong faith that ultimately all comes from G‑d. When we trust in G‑d and act generously toward others, we are fit to receive kindness and blessing from G‑d.3

Indeed, this seems to be the implication of the verses regarding debt amnesty:

This shall be the nature of the remission: every creditor shall remit the due that he claims from his fellow . . . There shall be no needy among you—since the L‑rd your G‑d will bless you in the land that the L‑rd your G‑d is giving you as a hereditary portion—if only you heed the L‑rd your G‑d and take care to keep all this instruction that I enjoin upon you this day. For the L‑rd your G‑d will bless you as He has promised you: you will extend loans to many nations, but require none yourself . . .4

Preventing Theft

Additionally, the Chinuch explains,5 this mitzvah trains us to distance ourselves from envy or even the desire to commit theft. After all, we can draw an a fortiori argument (kal vachomer) from this law: "Even with my own money that I lent out, the Torah said to forfeit it to the borrower when the Shemitah year arrives; I should certainly not covet or steal that which was never mine in the first place!?”

Taking Your Belongings With You

Our life and work in this physical, material world are only temporary. We are not here to accumulate wealth and belongings, but to serve G‑d, to whom the entire world belongs. Releasing our hard-earned money teaches us not to be overly invested in our business and material affairs, thinking that the harder we work the more we’ll have. After all, a single Shemitah can come and wipe it all out. Rather, everything comes from G‑d, and our efforts toward earning a livelihood should not come at the expense of our true purpose.6

Nothing to Pay Back

While all our answers thus far have focused on the lenders, others see this mitzvah as a reprieve for the borrowers. Since no one can work the fields during the Shemitah year, it makes sense that the poor borrower has no means of earning the money to pay back his debts. As such, the Torah declares all debts null.7

Amnesty of Our Debts to G‑d

The Torah as it exists down here on this physical plane is but a reflection of the Torah in the spiritual realms.8 The Rebbe9 explains that, like a creditor, G‑d gives us an abundance of blessings with the expectation that we “pay Him back.” For example, if we are blessed with children, we owe it to Him to educate them to follow His ways. If He grants us wealth, we must be careful to give charity and otherwise use it in accordance with His wishes.

G‑d, however, knows full well that at times the debtor falls short and is unable to pay back His loan. Thus, from time to time G‑d grants “amnesty” and forgives us for misappropriating that which He gives us.

So, as a reflection of this, in the year of Shemitah, we forgive those who may owe us.

By curtailing our work in the fields and instead dedicating the year to serving G‑d, we are in a sense putting aside our former selves that have sunk deep into the materialistic world. We are now like a new person with a clean slate, which in turn causes our previous “debts” to G‑d to be canceled.

The Hesitancy to Lend Money

We can now turn to the second part of your question, that this would seemingly cause lenders to hesitate to lend out their money close to Shemitah.

Indeed, about a hundred years before the destruction of the Second Temple, Hillel the Elder observed that people were becoming hesitant to give loans close to Shemitah to those who needed it. So he established the concept of a pruzbul, a process that transfers personal debts to the courts, thus making them collectible despite the Shemitah laws.

Although the rabbis are generally not empowered to circumvent a Torah precept, Hillel was able to do this since the Shemitah loan amnesty itself was no longer in effect on a biblical level.10

The Talmud explains that many of the Torah’s agricultural laws, including the agricultural rules of Shemitah, are dependent on all 12 Tribes living in the Holy Land. These conditions ceased to exist in the 6th century BCE, when the Assyrians conquered the Northern Kingdom of Israel and sent the majority of its population, the “Ten Lost Tribes,” into exile.11 The laws of Shemitah are inextricably tied to each other. Thus, biblically, Shemitah’s loan amnesty is in effect only when its agricultural rules are biblically observed.

It is quite possible that the fact that the Shemitah amnesty laws were only in effect rabbinically, coupled with the deteriorating spiritual level of the masses at that time, led some to hesitate to lend money, perhaps mistakenly believing that G‑d’s promise of physical abundance only applies when Shemitah is biblical.

Positive Within the Negative

The Rebbe explains that although the reason for the enactment of the pruzbul was a sign of the deteriorating spiritual level of the Jewish people of that time, there was a positive aspect to it as well. After all, the whole concept of the pruzbul is that, despite our lowly spiritual level, we can continue to do acts of kindness by lending and giving money to those in need.12

We pray for the day when these laws will once again be biblically in force, when all of the tribes of Israel will return to the land with the coming of the Moshiach, amen!

Editor's Note: Although loans are not canceled until the end of the Shemitah year, once the Shemitah year begins there are those who rule that a lender may not demand payment of a loan (although he may accept it without demurring if the borrower wishes to repay on his own). For this reason, many have the custom to make a pruzbul before Rosh Hashanah immediately prior to the Shemitah year, to be able to collect payment throughout the Shemitah year. Once the pruzbul has been made, any additional loans will require an additional pruzbul.

Others simply make a pruzbul at the end of the seventh year, just before the loans are suspended. To cover all grounds, there are many—including Chabad—who make the pruzbul twice, once before the Shemitah year, and once again just before it concludes.

For more on the pruzbul or to fill one out, see here.