Securing your loans

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RCA makes Pruzbul document available for creditors

By Yaffi Spodek

Issue of Sept. 26, 2008

The Rabbinical Council of America (RCA) has produced a formulated copy of the “Pruzbul,” a Rabbinic credit-preserving form, making it conveniently available to the public –– in Hebrew and English versions –– before Rosh Hashana.

According to halacha, any debts or loan agreements between Jews are nullified at the end of a shmittah (sabbatical) year such as this one, unless the creditor has signed a pruzbul agreement in advance, obligating the borrower to repay the money. Though there is a halachic dispute regarding the status of shemitat kessafim, the removal of debt, as a Biblical or Rabbinical law, the obligation to sign a Pruzbul document remains, for both men and women.

“B’zman hazeh, at this time, the consensus is that in the absence of yovel, the debts would still be canceled without the Pruzbul,” explained Rabbi Basil Herring, executive vice president of the RCA. “Shemitat kessafim still applies and the pruzbul would be required.”

“People are encouraged to do it and it thereby perpetuate the observance of the mitzvah and remind us of it,” said Rabbi Kenneth Hain of Congregation Beth Sholom in Lawrence. “The point is to remind people that our land and our money in an ultimate sense don’t belong to us.”

At this time of year, during the week preceding Rosh Hashana, “many Rabbis make the document available to congregants and encourage people to do it before the end of the year,” Rabbi Hain continued. “Over the years, it has become increasingly known and understood as being important.”

There are two ways for a lender to fulfill the obligation of Pruzbul, allowing him to collect his loans at any time. One option requires the lender to ask three men to sit as judges on a Beit Din. The lender then declares all of his outstanding loans and fills in the Pruzbul form as evidence.

The second alternative allows the lender to appoint two men to serve as witnesses to his declaration, proclaiming that all outstanding loans are to be submitted to the Beth Din of America in New York, comprised of Rabbis Gedalia Dov Schwartz, Mordechai Willig and Shlomo Weissman. The lender then fills in the Pruzbul form and is required to send it in to the Beth Din of America.

For both options, the men appointed as witnesses must be Torah-observant and they cannot be related to each other or to either the creditor or borrower. The witnesses are also required to sign the declaration. Only the person who issued the loan has to be present, and this applies to documented and undocumented loans alike, Rabbi Hain pointed out.

If someone made a loan after the date of the Pruzbul, a new Pruzbul must be written for that loan, which is why people are encouraged to fulfill the mitzvah immediately preceding Rosh Hashana. However, if a Pruzbul gets lost after it has been written, it doen not need to be replaced by a new one.

“The laws of Pruzbul are instructive in so many ways, as they demonstrate the Jewish tradition’s sensitivity to the poor, its understanding of economic realities, its practical problem-solving approach to life, its flexibility, its creative interpretation of ancient texts, and not least, an adherence to both the letter and the spirit of the law of the Torah,” said Rabbi Herring. “The RCA is pleased to assist the Jewish public in fulfilling this beautiful mitzvah.

Thanks to the efforts of the RCA, working in partnership with the Beth Din of America, Pruzbul forms are now available on the Internet, and can be downloaded from the RCA web site, www.rabbis.org.