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Ancient Jewish Custom of "Prozbul" Still Being Used to Assure Debt Collectibility

By Howard M. Friedman

In Israel last week, Rosh Hashanah marked the end of the Sabbatical Year-- the seventh year, in which, according to Jewish law, farm lands are to lie fallow. (See prior posting.) Also, according to a provision of Jewish law that was designed to assist the poor, most outstanding debts are cancelled at the end of the Sabbatical Year. Not surprising to modern economists, this provision in fact was counter-productive, leading to a freezing of the credit system near the Sabbatical Year. So 2,000 years ago, rabbis created a solution-- the "prozbul". Debtors, using this legal loophole, would transfer their debts to a rabbinical court which could collect them even after the end of the Sabbatical Year. Haaretz reported on Sunday that this custom is still being observed in many Jewish communities throughout the world, with assignments being made to the Supreme Rabbinical Court in Jerusalem.

In another twist on the custom, a charitable group in Israel sought out "loans" from donors just before the end of the Sabbatical year, with the understanding that they became grants once Rosh Hashanah passed. The funds are being used by the group, Pa'amonim, to provide budget counseling to those in financial distress. [Thanks to Religion and State In Israel for the lead.]

Full post as published by Religion Clause on October 07, 2008 (boomark / email).