Peruzbal

Summary of the laws of Shemitas Kesafim and a Peruzbal

The laws:

• The Torah commands us that at the end of the seventh year cycle one must annul all loans that he is owed by other Jews. It is thus forbidden for the lender to ask for the loan to be paid back. The Peruzbal is a process instituted by the Sages which allows a loan to remain active even after the Shemitah year, and thus allows one to collect the debt from the borrower.
• The upcoming Shemitah years are: תשעה ,תשפב ,תשפט ,תשצו
• Initially the Peruzbal is to be performed at the end of the sixth year, prior to Rosh Hashanah of the seventh year. It is a Mitzvah to publicize this matter as it is not well known to the public. If one did not do the Peruzbal at the end of the sixth year then he is to perform it anytime throughout the seventh year, up until Rosh Hashanah which is the beginning of the eighth year. The Chabad custom is to perform the Peruzbal both on Erev Rosh Hashanah of the sixth year and the seventh year.
• If one is not owed money by any person by the time Erev Rosh Hashanah of the end of the 6^th year arrives then one is to specifically lend money to another person in order to merit the Mitzvah of performing a Peruzbal.
• Women are obligated in the laws of Shemitas Kesafim just like men. Therefore if a [single] woman is owed money, or is owed a food item that she lent to her neighbor, then she is to perform a Peruzbal just like is the law by a man.
• One with a bank account in a Jewish owned bank has to perform a Peruzbal if one has money in his account before Rosh Hashanah of Shemitah.
• Workers that were due to be paid before Rosh Hashanah of Shemitah and have not yet been paid have their salary considered like a loan and require a Peruzbal by the worker.
• The lending of food to a neighbor has the same status as a loan. Thus a single woman who lends food items and the like before Rosh Hashanah needs to initially perform a Peruzbal if she desires to collect them back afterwards. If a married women lent food items then it is included within the Peruzbal performed by her husband.
• If one did not write a Peruzbal towards a loan that requires a Peruzbal to be written for then if he desires to collect it after the Shemitah year he may be lenient to do so.
• Some scrupulous Jews are accustomed that after they perform the Peruzbal they loan a small amount of money to another Jew. The Peruzbal is not valid over this loan as it occurred after the performance of the Peruzbal. [Some write that one is to specifically tell the borrower that he desires the loan to be paid back before Rosh Hashanah.] After Rosh Hashanah, when the friend comes to pay back the money, he then says to him “I forgive the loan” and does not accept the money. By doing so one fulfills the Mitzvah of “Shemitas Kesafim” in its literal form. “Praised be the Jewish people that love Mitzvos and perform them with joy”.
• The Shemitas Kesafim laws only apply to a loan made to a Jew. A loan that was made to a non-Jew is to be collected even after Shemitah.
• The Peruzbal is affective even regarding an undocumented loan that took place orally. Thus saying the above statement in front of a court suffices to refrain the loan from becoming nullified.

The Peruzbal process:

• It is proper to arrange the performance of the Peruzbal on Erev Rosh Hashanah immediately after Hataras Nedarim.
• Before the Shemitah year begins the lender is to gather a valid court of three men and state to them “I hereby hand to you all the debts that are owed to me that [and through doing so] I should be allowed to collect them whenever I desire.” Alternatively one is to write and sign a document including the above words and hand it to the tribunal of judges. A Rav can join another two Kosher Jews and prepare the Peruzbal document and then have people place their signature on it.

  “הריני מוסר לכם כל חובות שיש לי שאגבה אותם כל זמן שארצה“

• May one appoint a messenger to perform the Peruzbal on his behalf in presence of a valid court? Yes.
• A Peruzbal is only valid if the borrower possesses some piece of land or an object connected to land. It is valid even if the borrower does not actually own the land but possesses it through renting, or borrowing it even temporarily [during the time that the lender performs the Peruzbal]. If the borrower does not possess [land or an item attached to the ground] in any way then the lender is to acquire a piece of land it to him through another person [in order for the Peruzbal to be valid]. This acquiring of land to the lender may be done even not within the presence of the lender.
• The Peruzbal is only effective if it is performed before a valid court of law. A valid court consists of any three Kosher Jewish men.

Cases that a Peruzbal is not required:

• Mashkon/Collateral: If one lent money in exchange for an object from the borrower to serve as collateral for the loan then the Shemitah year does not abolish this loan [and a Peruzbal is not required]. If the collateral is worth less than the amount of the loan may the lender still demand the entire loan? Some Poskim rule that one may only demand payment for the amount of worth of the collateral and not any more. Others however rule that the entire loan is collectable.
• Due date of the loan is after Shemitah: If one loans money to his friend and sets the due date for after Shemitah, then the Shemitah year does not abolish the loan [and a Peruzbal is hence not required]. Thus a Peruzbal is only required for a loan that is due to be repaid before the end of the Shemitah year and the borrower has not yet done so.
• Charity organizations: Charity organizations that are owed money are not required to perform a Peruzbal in order to collect the money after Shemitah. This however only applies to charity organizations that cater only to paupers, such as the local charity fund for poor families. However those institutions of Chesed [Gemach] that cater to all people, whether rich or poor, have to perform a Peruzbal.