One of the interesting contemporary questions that have arisen in regard to the law of shemitat kesafim – the annulment of outstanding debts at the end of the shemita year – relates to the status of past debts collected by somebody who since adopted a religious lifestyle. If a person who has begun observing Halakha realizes that he had, in the past, collected debts after the shemita year without circumventing this law through the signing of a pruzbul document, must he return those debts? In some instances, this could result in a severe financial burden upon a newly-observant Jew. If he had lent large sums of money in the past and collected them after shemita, he could find himself crippled if he is now required to repay all that money.
A number of recent poskim addressed this question, including Rav Menashe Klein, in a responsum printed in the work Shemitat Kesafim Ke-hilkhatah (chapter 14). Rav Klein provides several different bases upon which we may allow the individual in this case to keep the debts that he had collected before he embraced Torah observance. Firstly, the Ba’al Ha-ma’or (cited by the Beit Yosef, C.M. 67) maintained that the law of shemitat kesafim does not, technically, apply nowadays, even on the level of rabbinic enactment, as it applies only when the laws of the jubilee are observed. According to the Ba’al Ha-ma’or, this law is observed only as a midat chasidut – a measure of piety – and does not constitute an outright halakhic obligation. And although the Shulchan Arukh (C.M. 67:1) does not accept this position, and rules that the law of shemitat kesafim applies nowadays by force of rabbinic enactment, the Rama observed that communities in his time collected debts without a pruzbul. Presumably, the Rama figures, they relied on the view that the law of shemitat kesafim does not practically apply. Common practice does not follow this view, but nevertheless, it may be introduced as a factor to consider in light of the difficult situations faced by newly-observed Jews who had collected debts after shemita in the past.
Rav Klein further notes the controversial view of the Sefer Ha-yerei’im (278) that a debt remains intact after shemita until the creditor annuls it. In other words, the Torah does not automatically erase debts with the close of the shemita year, but rater imposes upon creditors an obligation to waive all debts owed to them. The Yerei’im writes that after shemita, borrowers must offer to repay their debts, and thereupon the lenders bear an obligation to proclaim that they cancel the debts. According to this view, if a creditor who is not halakhically observant collects a debt after shemita, he has transgressed a Torah violation, but the money is legally his. He must repent for failing to fulfill his obligation – just as with any Torah violation – but he has no obligation to repay the money to the borrower. Most Rishonim disagree, and maintain that debts are automatically waived with the close of the shemita year. The Minchat Chinukh (479) writes that according to this view, money collected from debtors after shemita is considered stolen money, and must be returned. Even after the creditor dies, the Minchat Chinukh writes, his inheritors must repay the debtor’s from the estate. According to the Yerei’im’s view, however, this is not the case at all, and this, too, may be taken into account as a basis for absolving one who has embraced halakhic observance from this financial burden.
This is also the ruling of Rav Shlomo Zalman Auerbach, in his Minchat Shelomo (Shevi’it 10:1). He adds the contention that if the lender and borrower had been informed of the requirement of shemitat kesafim at the time the loan was given, the borrower would have certainly agreed to repay the debt nonetheless. As such, we may view this loan as one which was taken on the implicit condition that it would be repaid after shemita. Halakha allows granting loans on such a condition, and thus the lender did not act improperly by collecting the debt after shemita, and so he may certainly keep the money.
(See also this article on the subject at Olamot)