Do Jews forgive all debts and break from farming during Shemitah? If a Jew has a mortgage that is longer than 7 years, would that debt be forgiven? Could a Jew get a 30 year mortgage from a Jewish owned bank that practices Shemitah?
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1 Answer
Yes.
Nowadays every seventh year it is forbidden for Jews to work Jewish owned land in the Land of Israel.
Most Rishonim understand that the cancelling of debts applies nowadays everywhere as well (Shulchan Aruch CM 64:1). Note that debts which are secured by collateral or whose collection is the responsibility of the courts are not cancelled (:11-12). This can be accomplished through a document called a Prozbul which is signed nowadays by many Jews just prior to when the debts would be cancelled (:18). Regarding your long term loans: only the payments that have come due before the seventh year ends would be cancelled (:10) and that's again only if there is no collateral.
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This is a great answer, but i need more information. Why is there an exception for collateralized debt? What is the justification for such?– NephilimOct 15, 2023 at 17:00
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1@Nephilim A loan with collateral is in some sense already paid back, since the creditor already has the right to the value of his loaned money. He has just allowed the debtor the option of buying back the collateral with cash. It's in the debtors interest to have that right persist and not be cancelled.– Double AA ♦Oct 15, 2023 at 17:14