The Sabbatical year is famous as time the land lies fallow, but Shmittoh has another financial application. During the entire Shmittoh year loans which are due may not be collected. If the debtor wishes to reimburse the lender he is permitted to do so, nay he obligated to do so. However the creditor may not approach the borrower for repayment. If by the end of Shmittoh the borrower has still not repaid the loan, the debt is voided.
Why does the remission go in two stages; during Shmittoh year the lender may not claim but the loan is still outstanding, and at the close of Shmittoh the debt is completely nullified?
The purpose of annulling debts has a dual function; one, to benefit the lender and two, to benefit the borrower. The debtor benefits by avoiding being overburdened with payments, this remission is the Torah built in bankruptcy law – every seven years previous debts are voided and one gets a fresh chance to begin anew. The benefit to the creditor is more subtle: Man has a habit of becoming obsessed with money, every seven years he needs a reminder of the Psalmist’s words: “Mine is the silver, Mine is the gold, says Hashem” money is nothing but a G-d given responsibility.
The beginning of the year starts the learning curve for the lender, he may no longer collect his loan nor pressure the borrower, teaching him that money is G-d’s. This runs concurrent with the entire year paralleling the prohibition to till the land which similarly educates that the land belongs to Hashem. The end of the Shmittoh year is a time when planting begins anew, it is also the time that gives the borrower a fresh start, by annulling his prior debts threreby helping him to a new beginning.
Thus these laws are not nullification in two stages, they are the converging of two goals meeting in this Mitzvah. One teaching the lender the money is not his own, and for this purpose all that is necessary is to restrict him from making a claim. Two providing the borrower with a clean slate, this requires the annulment of the note.
Rabbi Yechezkel Taub of Kuzmir (1755- !856) was the founder of the Modzitz dynasty. The Rebbe was once approached by Reb Shmuel of Sokolov with the following request. Reb Shmuel’s sons had gone into business and had become very successful amassing much money. Reb Shmuel was concerned that this abundance of wealth would have a detrimental effect on them, making them haughty and eventually leading them to reject their Judaism. Thus Reb Yechezkel was requested by Reb Shmuel to pray that his sons lose their money and thus remain true to the faith of their father.
The Modiztiz Rebbe was opposed to the idea, as it is possible for them to be wealthy and Torah true Jews at the same time. Instead of praying that they lose their wealth, let us pray that they not turn away from their religion, after all that is the intended goal.
Forgiving a debt in lieu of payment for a service may be also considered “Shabbos earnings”.