(1) Every seventh year you shall practice remission of debts. (2) This shall be the nature of the remission: all creditors shall remit the due that they claim from their fellow [Israelites]; they shall not dun their fellow [Israelites] or kin, for the remission proclaimed is of יהוה. (3) You may dun the foreigner; but you must remit whatever is due you from your kin. (4) There shall be no needy among you—since your God יהוה will bless you in the land that your God יהוה is giving you as a hereditary portion— (5) if only you heed your God יהוה and take care to keep all this Instruction that I enjoin upon you this day. (6) For your God יהוה will bless you as promised: you will extend loans to many nations, but require none yourself; you will dominate many nations, but they will not dominate you. (7) If, however, there is a needy person among you, one of your kin in any of your settlements in the land that your God יהוה is giving you, do not harden your heart and shut your hand against your needy kin. (8) Rather, you must open your hand and lend whatever is sufficient to meet the need. (9) Beware lest you harbor the base thought, “The seventh year, the year of remission, is approaching,” so that you are mean and give nothing to your needy kin—who will cry out to יהוה against you, and you will incur guilt. (10) Give readily and have no regrets when you do so, for in return your God יהוה will bless you in all your efforts and in all your undertakings. (11) For there will never cease to be needy ones in your land, which is why I command you: open your hand to the poor and needy kin in your land.

Hillel instituted the Prozbul. We have learnt elsewhere: A prozbul prevents the remission of debts [in the Sabbatical year]. This is one of the regulations made by Hillel the Elder. For he saw that people were unwilling to lend money to one another and disregarded the precept laid down in the Torah, Beware that there be not a base thought in your heart saying, etc. He therefore decided to institute the prosbul. The text of the prozbul is as follows: “I hand over to you, So-and-so, the judges in such-and-such a place, [my bonds], so that I may be able to recover any money owing to me from So-and-so at any time I shall desire”; and the prosbul was to be signed by the judges or witnesses. [AJWS translation]

[A loan secured by] a prozbul is not cancelled. This was one of the things enacted by Hillel the elder; for when he observed people refraining from lending to one another, and thus transgressing what is written in the Torah, “Beware, lest you harbor the base thought, [‘The seventh year, the year of remission, is approaching,’ so that you are mean to your needy kinsman and give him nothing.” Hillel enacted the prozbul.

One man gives generously and ends with more;
Another stints on doing the right thing and incurs a loss.

GEMARA: Rav Yehuda says that Shmuel says: In the case of one who lends money to another for a period of ten years, the Sabbatical Year abrogates the debt (see Deuteronomy 15:1–11) and absolves the borrower of the obligation to repay it.

וזה דבר השמטה, “and this is the matter of the remission;” our sages in Sheviit 10,8 explain that the lender tells the borrower who comes to him after the Shemittah year has elapsed (and he had failed to repay his loan on time), “I am releasing you from your debt.” If the borrower wants to voluntarily repay the sum he owes, the lender may accept it, seeing that the Torah did not forbid the borrower to repay his debt as opposed to loans with interest where the Torah specifically forbade both the payment of and the accepting of interest on loans between Jews (Deut. 23,8). In the case of the Shemittah, the Torah imposed restrictions only on the lender, i.e. he must not harass the borrower to pay him. The concept is that during that year we must not act as if we owned the earth but must demonstrate our awareness and agreement that the earth is the Lord’s by our behavior in practice. This is the meaning of כי קרא שמטה לה', “for he proclaimed it a Shemittah for the Lord.”
Our sages in Sheviit 10,9 have said that when someone (a borrower) repays the lender what he owes him even though the Shemiitah year has elapsed, the Rabbis will relate very positively to such a person. On the other hand, if the borrower does not repay his debts even though he is legally in the clear, he risks that the lender will shame him by spreading the word that this borrower took advantage of the good nature of the lender and simply ate up his money.
There is a halachic provision whereby the borrower makes a declaration (entirely voluntarily) prior to receiving a loan that he waives his right not to repay the loan if for some reason he is unable to repay it before the Shemittah year ends. We have a general rule that all mutually agreed conditions involving money matters can override what the Torah wrote. Moreover, the lender is allowed to demand repayment during any time of the Shemittah year provided the year has not come to a close. This is why the Torah writes מקץ, “at the end.”
If someone who is owed money which should have been repaid prior to the Shemittah year hands over the I.O.U he is holding to a court of law asking the court to act as his collector, he cannot subsequently release the debtor from his debt seeing that the debtor is already considered as having been harassed, נגוש, so that the Torah’s warning not to harass the borrower can no longer be fulfilled. In such a situation the lender foregoes the right to ask for repayment (personally) as soon as the Shemittah year ends. (unless he had made an agreement with the borrower concerning this eventuality). Orphans who are of age (by the end of the Shemittah) and who are in possession of I.O.U.’s left to them by their father do not need to prove that the borrower had waived his right of non repayment of the debt at the end of the Shemittah year (Choshen Mishpat 67,29). These orphans are considered as if they actually had the requisite documents in their possession (Shevuot 45).
The laws pertaining to the release of overdue debts in the Shemittah year apply world-wide, as opposed to the laws pertaining to the earth and orchards, etc., which apply only in the land of Israel. The Rabbis decreed this in order that the whole concept of the Shemittah legislation not be forgotten during the long years of exile of the Jewish people.
The reason that the sheviit, seventh year, is capable of overriding certain oaths, is because the Torah writes here וזה דבר השמטה, using the word דבר, word, i.e. something uttered by the mouth. If someone swore to his creditor that he would pay him back the loan even though the Shemittah year would occur prior to the date of his repayment, even if he confirmed it in writing, etc., he need not keep his oath (Choshen Mishpat 67,6).
There is a conceptual linkage between the shemittah of lands, etc., and shemitat kesafim (monetary debts) seeing the Torah writes the word תשמטנה; in Exodus 23,11 the Torah had already spoken of releasing land, i.e. agricultural harvests, from the claims of ownership. It is fairly clear that in our portion another kind of shemittah, i.e. monetary debts, are referred to. Seeing that the applicability of this rule in the Diaspora is only rabbinic the Rabbis permitted the פרוזבול, the writing over of the debt to the Bet Hadin, court of law, as otherwise there would not be any people ready to extend interest-free loans which would prove uncollectable also. If someone borrows a sum of money for ten years the lender does not need to forgive the loan in the first shemittah year seeing it had not become due yet; you cannot release something to which you did not have a claim yet. If the loan is unpaid when the second shemittah year comes around, its laws apply to that loan.

§ The mishna teaches: The Sabbatical Year abrogates the obligation to take an oath about a debt, just like it abrogates a debt. The Gemara asks: From where is this matter derived? Rav Giddel says that Rav says: It is derived from the fact that the verse states: “And this is the matter [devar] of the release: Every creditor shall release that which he has lent to his neighbor; he shall not exact it of his neighbor and his brother, because the Lord’s release has been proclaimed” (Deuteronomy 15:2). Since the word devar also means statement, this teaches that the Sabbatical Year releases, i.e., abrogates, even a statement, i.e., an oath.

The shemittah sabbatical agricultural year legislation, referred to in the Torah in several places, (Parshat Mishpatim, Behar, Re-ay) is therefore of extreme importance. Disregard of it brings in its wake a host of punishments including national exile. This is somewhat difficult to understand, since if the purpose of the legislation is agricultural, i.e. teaching us that working the soil in rotation restores the earth's fertility, non observance would produce poor crops and be a punishment in itself. On the other hand, it is difficult to fathom why G'd should be more jealous of the state of the earth, than of sins which appear far more serious. It seems therefore, that the shemittah legislation is to alert us to the important truth that ownership of the land is an asset to our development towards our national and individual spiritual goals only, when such ownership is used in the way the Torah wishes it to be used. Just as the week, i.e. six working days plus one Sabbath testify to the fact that there is one Creator, so do six years of work on the land plus one year of rest, shemittah, remind us that ownership rests with G'd, and that we have to fulfil His commandments. Once one accepts that creation had been ex nihilo, it follows that the Creator is entitled to be the lawgiver. The Torah spells out that the purpose of shemittah is "for G'd," and that our function in taking advantage of the land is basically le-ochlah, to fulfil our physical needs, not as in the case of the gentile, our greed. Chamor, the king of Shechem refers to the purpose of land, when he describes it as "being capable of accomodating all the requirements of the sons of Jacob." (Genesis 34,21). This is an attitude which is quite different from the Torah viewpoint. The requirement in that year to release all monetary debts, is a further clear indication that material wealth must never be allowed to become an end in itself. The seven times seven years yovel legislation is representative of an entire "world," a complete cycle. "He shall serve him le-olam, means until the completion of the cycle, until the yovel year. This is a reminder to man that just as he has to return to the earth at the end of his life, so the idea of a rejuvenation of the land, restoring it to original ownership, keeps alive the idea that we ourselves are not on this earth litzmitut, permanently. The commandments concerning treatment of "slaves" who had become such due to having lost their financial independence, is stated here to enlist our empathy. Once we have realised that our own hold on life is tenuous, that our possessions are transient, we can appreciate better that the "slave" deserves humane treatment from us. The same applies to the laws governing unfair financial dealings, overcharges etc. The fact that G'd is prepared to demonstrate that He supervises our welfare by providing excess yield by our fields in the year preceding the shemittah, is further encouragement to observe the commandment. Ignoring the shemittah, legislation then, expresses disregard of our entire philosophy. This is why the consequences are commensurate, not disproportionate to the sin committed. The Talmud Erchin 30, draws our attention to the fact that the consequences of disregarding even regulations that are only peripheral to the actual shemittah observance, can be most severe. If someone deals in produce that has been grown illegally during the shemittah year, he may wind up having to sell himself into slavery to keep body and soul together. Our long national exile is due to our having failed to observe the shemittah legislation.

(24) If you lend money to My people, to the poor among you, do not act toward them as a creditor; exact no interest from them. (25) If you take your neighbor’s garment in pledge, you must return it before the sun sets; (26) it is the only available clothing—it is what covers the skin. In what else shall [your neighbor] sleep? Therefore, if that person cries out to Me, I will pay heed, for I am compassionate.

(35) If your kin, being in straits, come under your authority, and are held by you as though resident aliens, let them live by your side: (36) do not exact advance or accrued interest, but fear your God. Let your kin live by your side as such.