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The Torah [Re’e 15:2] commands us that at the end of the seventh-year cycle one must annul all loans that he is owed by other Jews. It is thus forbidden for the lender to ask for the loan to be paid back. The Peruzbal is a process instituted by the Sages which allows a loan to remain active even after the Shemita year, and thus allows one to collect the debt from the borrower. These laws will discuss the different situations in which one may not collect a loan and in what way one can avoid the loans nullification and save himself a monetary loss.
את הנכרי תגש ואשר יהיה לך את אחיך תשמט ידך.
What is Shemita?
The Torah commands us to count the years for the sake of sanctifying the seventh year. Shemita is the seventh year of each cycle. The cycle first began when the Jews entered Eretz Yisrael and settled the lands. This occurred 14 years after the entrance into Eretz Yisrael, as it took 7 years to conquest the land and another 7 to settle it.
When is Shemita?
The year of Shemita [in the time of the writing of these laws by the Alter Rebbe] was 5544/1784. Thirty-three cycles of Shemita have passed since that time. The year 5782 is the next Shemita year which will begin the 35th Shemita cycle from the Shemita year written in Admur.
The upcoming Shemita years are:
*All years of the secular calendar refer to the dates corresponding to the start of the Hebrew year. Thus in 5775 the Shemita year begins in the 25th of Sept. 2014 and continued until the 14th of Sept. 2015.
 Shemos 23:10-11; Vayikra 25-1-7
 Rambam Shemita 10:2; Toras Kohanim Behar 1
 Background of the Shemita cycle calculations: The cycle first began when the Jews entered Eretz Yisrael and settled the lands. This occurred 14 years after the entrance into Eretz Yisrael, as it took 7 years to conquest the land and another 7 to settle it. They then counted Shemitas and Yovlos for over 16 Jubilee cycles plus another 36 years [836 total years] until the destruction of the Temple. Thus, there were a total of 117 Shemitas and 16 Yovlos counted from the settling into Eretz Yisrael until the destruction of the first Temple. [The Yovel years in between do not count as part of the seven-year cycle and hence one must decrease 16 Yovel years from the 836-year calculation. See Rambam 10:7; Nedarim 61 following the opinion of Rabanan as opposed to Rebbe Yehuda] The year of destruction was the first year of the 118th Shemita cycle. [See Rambam 10:4 and 8] When some of the tribes of the Jewish people were exiled in the times of Sancheirev [many years prior to the destruction] the Yovel year was abolished as it is contingent on the inhabitance of Eretz Yisrael by all Jews. [Erechin 32b; Rambam 10:8] Nevertheless they continued counting the Yovel year every 50th year in order not to confuse the Shemita cycle which is only to begin after the Yovel year. [Erechin 32b; Rambam 10:3] However during the time of the 70-year exile between the destruction of the first Temple and rebuilding of the 2nd Temple it is disputed as to whether the Jews counted the Yovlos during that time. The Rambam 10:3 holds that they continued to count the Yovlos just like prior to the destruction, while the Geonim have a tradition that they did not count the Yovlos during these 70 years. This same dispute applies also for after the destruction of the second Temple. According to the Geonim, ever since the destruction of the second Temple we no longer count the Yovel year at all and hence the 50th year is the first year of the next Shemita cycle. According to this opinion the year 5775 is the seventh year of the 278th Shemita cycle since the destruction in 3829. However according to the Rambam ibid it is a totally different calculation as every 50th year we push off the start of the new Shemita cycle one year. Hence according to the Rambam, in the 1,946 years between the destruction in 3829 and our current year of 5775 we have 38 Jubilee years that were not counted in the cycle and hence in his calculation 5755 is the 4th year of the 272nd year of the Shemita cycle and the year 5775 is not Shemita! Practically, even the Rambam concludes that we rely on the Geonim as tradition is a great pillar in Jewish law and is to be relied upon. This is the final ruling today as brought in the calculated years of: Admur 36; Rama Choshen Mishpat 67:1 [year 5320]; Michaber Yoreh Deah 331:19 [year 5313]
 Admur 36; Geonim; Custom of Eretz Yisrael brought in Rambam Shemita 10:6; Rama Choshen Mishpat 67:1 [year 5320]; Michaber Yoreh Deah 331:19 [year 5313]