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Jan 9, 2014
Wiping away debts this shmitta..
Shmitta is coming.. soon we will get to do the pruzbol, which is almost pointless in today's day and age.
The pruzbol, for those of you who do not know, is a solution created to solve a serious problem. According to the Torah, shmitta does not just affect your fruits and vegetables, but also your financial debts. When shmitta comes (or goes, depending on the opinion), all debts are wiped away.
The sages found that such a rule would prevent those who have from lending to those who need - why risk not being paid before shmitta and the debt being wiped away? So, they created the pruzbol which basically signs over your debts to beis din, and [you on behalf of] beis din is allowed to collect debts.
It is basically purposeless today because we get around all these issue sin other ways - by using hetter iska in all our major business dealings. We do that for other reasons - for purposes of charging or paying interest on loans - but it also affects this because those debts are no longer debts but investments. It still has some purpose, as you generally will not have a hetter iska for the 5, 20 or 100 shekels you lent your buddy, but for the more serious debts you usually will..
Minister Uri Orbach and Deputy Minister Rav Eli Ben Dahan are trying to initiate a "social shmitta" that would bring back the shmittat kesafim, the wiping away of debts, to some degree.
The ministers, and they are calling on MKs to support it and participate in the program, are working to get government authorities to wipe away the debts of elderly citizens who are in financial crisis. They have so far turned to authorities including the tax authority among others, and they say that the shmitta is a year for renewing social values, social justice, and strengthening both the family unit and the connection to nature..
They will need to determine qualifications for getting the debts wiped off - that will be based on socio-economic level and cooperation with welfare and social services.
(source: Kikar)
It is a nice idea to help the needy in this way, in a very Torah-supported way, while turning the discussion to helping the needy, starting anew, and the social support system rather than just the regular arguments about which system of fruits and vegetables you do or do not rely on...
The pruzbol, for those of you who do not know, is a solution created to solve a serious problem. According to the Torah, shmitta does not just affect your fruits and vegetables, but also your financial debts. When shmitta comes (or goes, depending on the opinion), all debts are wiped away.
The sages found that such a rule would prevent those who have from lending to those who need - why risk not being paid before shmitta and the debt being wiped away? So, they created the pruzbol which basically signs over your debts to beis din, and [you on behalf of] beis din is allowed to collect debts.
It is basically purposeless today because we get around all these issue sin other ways - by using hetter iska in all our major business dealings. We do that for other reasons - for purposes of charging or paying interest on loans - but it also affects this because those debts are no longer debts but investments. It still has some purpose, as you generally will not have a hetter iska for the 5, 20 or 100 shekels you lent your buddy, but for the more serious debts you usually will..
Minister Uri Orbach and Deputy Minister Rav Eli Ben Dahan are trying to initiate a "social shmitta" that would bring back the shmittat kesafim, the wiping away of debts, to some degree.
The ministers, and they are calling on MKs to support it and participate in the program, are working to get government authorities to wipe away the debts of elderly citizens who are in financial crisis. They have so far turned to authorities including the tax authority among others, and they say that the shmitta is a year for renewing social values, social justice, and strengthening both the family unit and the connection to nature..
They will need to determine qualifications for getting the debts wiped off - that will be based on socio-economic level and cooperation with welfare and social services.
(source: Kikar)
It is a nice idea to help the needy in this way, in a very Torah-supported way, while turning the discussion to helping the needy, starting anew, and the social support system rather than just the regular arguments about which system of fruits and vegetables you do or do not rely on...
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I don't think that's always correct. As I recall, a common form of heter iska used is structured so that part of the money is indeed a loan and the remaining part is the investment. One of the reasons for using this format is to fulfill the idea of extending interest free loans.
ReplyDeleteWhat does heter iska have to do with shmitta? Its is a way around the issue or ribbis.
ReplyDeleteAll loans are cancelled in shmitta unless there is a prozbol, or "masar shtarosav l'beis din, or a mashkon
Hetter iska has nothing to do with shmitta, but because we use Hetter iska on our major debts, the pruzbol had become almost irrelevant
DeleteRafi, Since a heter iska frequently is arranged so that part of money is considered a loan (I think it's typically 50%), then a prozbul is still very relevant.
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