Question

The Greenbergs still have many bottles of oil, packets
of sugar and flour, etc. owed to them (see "Good Neighbors" – Parshas
Shoftim). Since the end of the sh’mittah year is approaching,
they wish to know whether these outstanding "debts" need to be
included in the pruzbul document they intend to draw up, which will
allow them to collect outstanding debts after the end of the year. They
also wish to know whether Mrs. Greenberg should write the pruzbul,
or Mr. Greenberg?

Answer

The Torah states that debts which were
outstanding at the end of the sh’mittah year become annulled. It is
forbidden to demand payment of such a debt after the end of the year –
"He must not demand payment, etc." (Devorim 15:2). In
addition, there is a positive commandment, "Every creditor shall
relinquish his claim," (Ibid.) to refrain from asking for payment of
such debts. Both these (nowadays rabbinic) commandments apply equally to
men and women.

Thus, if a woman is owed money and payment of the debt
was due before the end of the sh’mittah year, she must also write a
pruzbul. Money or food items lent by a married woman are generally
assumed to be the property of her husband. Therefore, he should include
them in his pruzbul. However, if the source of the loan was the
wife’s personally property, over which the husband has no jurisdiction,
she should make her own pruzbul. What usually happens is that the
wife appoints her husband as her agent to write a pruzbul in front
of Beis Din.

How does a pruzbul work? As mentioned above, the
Torah prohibits collection of debts which were outstanding at the
end of the sh’mittah year. However, this prohibition only applies
to the individual creditor. If he hands over the documents to Beis Din,
they may collect the debt even after the end of sh’mittah.
Similarly, handing over collection rights to Beis Din has the same
effect. When Hillel the Elder saw that people refrained from lending money
to the poor towards the end of sh’mittah year, for fear that the
debt would become annulled, he instituted the formal pruzbul
document. In this document, the lender declares that he is handing over
all his debts to Beis Din. Accordingly, he may collect these
debts – as an agent of Beis Din – whenever he wishes. The Remo
(Choshen Mishpot 67:20) is of the opinion that a verbal declaration
is sufficient. However, he agrees that it is still preferable to draw up a
document. It is customary to make a verbal declaration in addition to
writing the document.

Who should draw up a pruzbul? The short answer
is – everyone! It often happens that a person forgets that he has lent
money or food items to others. The bank – or other institutions – may owe
you money. If you don’t write a pruzbul, you will not be able to
collect the money later on! The pruzbul is worded in general terms,
to include all outstanding debts and does not require specification.
Jewish-owned banks must also write a pruzbul. It is preferable that
the general director of the bank writes a pruzbul for all the
bank’s branches. Should he fail to do so, the individual branch manager
should draw one up for his own branch. Since the pruzbul only
covers those debts due till the time of signing the document, banks should
leave writing a pruzbul till the afternoon of Erev Rosh
Hashonoh, so as to cover late transactions. In limited-liability
companies, hospitals and other institutions, an official who is authorized
to make financial decisions on behalf of the organization should make the
pruzbul. In some cases, this may even be a deputy director or manager. A
shopkeeper need only make a pruzbul to cover those customers’
accounts where payment was already due (e.g. after the end of the month).
Once payment is due, he is deemed to be granting a loan to the customer
and not giving credit.