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1. The Biblical and Rabbinical obligation:
It is a positive command in the Torah for a lender to abolish his loans by the Shemita year. It is likewise a Biblical negative command for a lender not to demand payment from his borrower from after the Shemita year. A lender who ignores the above and proceeds to demand the collection of the loan, transgresses the above positive command, and likewise transgresses the above negative command.
Today’s times: [Biblically, the command to annul loans during Shemita only applies during times that the Yovel cycle is in practice, which is when all the tribes are living in Eretz Yisrael.] In today’s times [however] the laws of Shemitas Kesafim [abolishing debts] during the year of Shemita is [only] a Rabbinical enactment. This applies in both Eretz Yisrael, and in the Diaspora.
Must one verbally pronounce that the debt is nullified?
The lender must verbally state that the loan is null and void. He should thus state “Mishamet Ani/I have annulled the loan.”
 Rambam Shemita Veyovel 9:1
 Admur Hilchos Halva 34
 Michaber C.M. 67:1; Rambam Shemita 2:9
Other Opinions: See Ramban brought in Urim Vetumim 67:1 that holds Shemitas Kesafim is a Biblical obligation even today, and even in the Diaspora.
 Rambam Shemita 10:8
 Admur 34; Gittin ibid; Rambam 9:3; Michaber ibid
 Admur ibid; Michaber ibid
 Gittin 37b; Letter of Rav Shtern printed in Halichos Hashevi’is