A d’var Torah by Rabbi David Rosenn for Yom Kippur of the Sabbatical/Shmita Year 5782
This Tishrei marks the beginning of a sabbatical year (shnat shmita). Every seven years, we are commanded to let the land and the people who work it rest, an echo of the weekly sabbath. Debt cancellation is part of the sabbatical year, too, but God knew there would be pushback:
“Every seventh year you shall practice release of debts,” we are told in the 15th chapter of Deuteronomy,
“…Every creditor who has lent anything to his neighbor shall release it; he shall not demand payment from his fellow or kinsman, for the shmita (release) of the ETERNAL has been proclaimed. (Deuteronomy 15:1-2)
This is inspiring stuff: a periodic break from the burdens of debt, echoing the regular rest from productivity experienced by the land and the laborers who work it. And yet, just a few verses later we read this warning:
Beware lest you harbor the base thought, ‘The seventh year, the year of release, is approaching,’ so that you are mean to your needy kinsman and give him nothing. He will cry out to the ETERNAL against you, and you will incur guilt. (Deuteronomy 15:9)
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And if the stick is not enough, there is a bit of carrot, too:
Give to him readily and have no regrets when you do so, for in return the ETERNAL your God will bless you in all your efforts and in all your undertakings. (Deuteronomy 15:9-10)
The Torah recognizes it is hard for people to give up on what they are legitimately owed. It sees that, despite the poetic power of the septennial sabbatical release, creditors may still demand their due, or they might simply stop lending in advance of the sabbatical year to avoid incurring losses. Apparently this happened so often that by Second Temple times, the cancellation of debt was itself cancelled.
Hillel the Elder, acting mipnei tikkun olam, for the sake of the proper functioning of society, devised a workaround to ensure that credit would not dry up and that creditors would not be driven to sin. His solution had the court act as an intermediary, collecting from the debtor and repaying the original creditor, ensuring that neither party lost money or got away with shirking. This arrangement, known as pruzbol, is the parade example of rabbinic legal fictions, and it is often seen as a response to the weakness of human nature, a necessary compromise that privileges a functional economy over our loftiest social ideals.
But what if the maintenance of debts is not just a concession to reality? What if canceling the cancellation of debt is a strong theological stance representing its own set of lofty social ideals?
Lending is, after all, an act of faith. When you lend money to a person in need, especially when there is no compensating interest paid, you are signaling trust in that person. Your loan uplifts them not just financially, but spiritually, too: despite whatever circumstances have led them to this point, trusting them to repay demonstrates that there are still people who have faith in their future, and that affirming display of faith is itself a key function of the loan. After all, when someone who is financially shaky accepts a loan, they are also taking a leap of faith that they will be able to repay as they promised. Your faith in them combines with and amplifies their faith in themselves.
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Moreover: The borrower and the lender establish a relationship through a loan where both depend upon the other for something important over time. If the loan terms are fair and flexible and the borrower repays, the relationship becomes one of mutual appreciation and gratitude. Compare this to a tzedakah transaction, where the giver and the recipient meet for just a moment (or, in the case of anonymous giving, not at all), forming no lasting ties.
Debts are obligations, and Jewish culture is built around obligations. Release can feel sweet, but it is a blunt instrument, wiping away good debts with the bad. Of course, in some cases, it makes sense to release people from obligations; for example, if those obligations are simply impossible to fulfill or if they were imposed unfairly or under duress. 
But regular interest-free loans made to help someone through a time of need — the kind of loans described in the Torah — are usually not that type, and shmitat k’safim, the outright cancellation of debts, weakens the ties of mutuality and obligation that borrowing creates.
Perhaps that is why Hillel felt emboldened to devise a structure that explicitly skirts a mitzvah in order to keep debts in place during a sabbatical year. He saw that debt cancellation across-the-board posed a threat to something valuable for the deeper structure of society: our ability to mutually obligate ourselves to one another. After all, what is society but a set of mutual obligations, an echo of even larger covenants, which we should not easily release?
Rabbi David Rosenn is the President and CEO of the Hebrew Free Loan Society in NYC.