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Shlomo returned excited from a summer visit to Israel. “It was fascinating,” he exclaimed to his friend Eli. “Scattered all around the country were fallow fields and orchards, with billboard signs saying ‘Shemittah is observed here.’ All fruit and vegetable stores state in the kashrus certification the status of their produce.”

“It’s a pity that we barely notice shemittah outside of Israel,” responded Eli.

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“Soon we’ll have a chance,” commented Shlomo, with a grin.

“What do you mean?” asked Eli.

“When the shemittah year 5775 concludes, in another month, shemittas kesafim takes effect and outstanding loans are cancelled,” explained Shlomo. “Most authorities rule that this applies also outside of Israel, even nowadays, although the practice in some places was to collect debts even after shemittah.” (C.M. 67:1; Shemittas Kesafim U’pruzbul 2:7)

“Just a minute,” said Eli. “My neighbor had a lot of expenses over the summer. Yesterday, he asked to borrow $5,000 for three months, until he can balance his account.”

“Did you lend it to him?” asked Shlomo.

“I was happy to,” replied Eli. “I just insisted that we draft a proper document, so that we don’t run into misunderstandings later. What happens when shemittah ends? Will this loan be cancelled?”

“I suppose so,” said Shlomo. “Why should it be different from any other loan?

“It doesn’t make sense, though,” argued Eli. “If the loan was granted for three months, past the shemittah, clearly the understanding was that the loan should not be cancelled. Otherwise, what’s the point of the loan?”

“Is that reason enough that shemittah should not cancel the loan?” countered Shlomo. “How does that change the halacha?”

“So there’s no way to lend past the shemittah year?” asked Eli.

“I don’t know,” acknowledged Shlomo. “Let’s go ask Rabbi Dayan.”

“Does shemittah cancel a loan due only after shemittah?” asked Shlomo.

“The Gemara [Makkos 3a-b] cites two versions of a statement of Shmuel,” replied Rabbi Dayan. “According to the first version, Shmuel maintains that shemittah cancels the loan, since it is ultimately destined for collection. According to the second version, however, shemittah does not cancel the loan, since there is no imminent threat of collection.”

“Whom do we rule like?” asked Shlomo.

“Most authorities follow the second version, that shemittah does not cancel the loan,” answered Rabbi Dayan. “The Shulchan Aruch rules this way as well. Only a loan that is already due is cancelled by shemittah. Furthermore, some write that a due date after shemittah is like an unstated stipulation by the borrower that he will not evade payment after shemittah.” (C.M. 67:9-10; Ketzos 67:3)

“What about a loan with no specified due date?” asked Shlomo.

“The default time for an unspecified loan is 30 days,” replied Rabbi Dayan [C.M. 73:1]. Therefore, an unspecified loan granted before Elul is past due, and cancelled by shemittah. Moreover, many authorities rule that even one granted in Elul – although not due until after Rosh Hashanah – is cancelled. While the lender cannot force payment until 30 days, a responsibility to pay exists even beforehand if the borrower can do so easily. Furthermore, the practice in some places is to demand payment even within 30 days.” (Bach C.M. 67:13; Ketzos 67:4; Tumim 67:16; Minchas Shlomo 3:132.19.3; Magen Avraham 307:14)

“What about a loan due in installments, some before shemittah and some afterward?” asked Shlomo.

“Installments due before shemittah that were not paid are cancelled by shemittah,” answered Rabbi Dayan, “whereas installments due after shemittah are not cancelled.” (Responsa Rambam #241)

“Of course,” concluded Rabbi Dayan, “if the lender writes a pruzbul, the loan is not cancelled.”

(To be addressed later, B”H.)

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Rabbi Meir Orlian is a faculty member of the Business Halacha Institute, headed by HaRav Chaim Kohn, a noted dayan. To receive BHI’s free newsletter, Business Weekly, send an e-mail to subscribe@businesshalacha.com. For questions regarding business halacha issues, or to bring a BHI lecturer to your business or shul, call the confidential hotline at 877-845-8455 or e-mail ask@businesshalacha.com.