Shevi'is, Chapter Ten, Mishnah 1. This chapter closes the laws of Shemittah, and it does so by presenting the laws of the cancellation of debts: the Torah establishes that a loan a person holds when Shemittah arrives is released. According to most of the Rishonim, this release takes effect at the end of the Shemittah year.
"Shevi'is meshammetes es hamilveh, bishtar veshelo bishtar":
The Shemittah year causes the loan to be released, whether it was made with a document or without a document.
What does the Mishnah mean by "with a document and without a document"? This is the subject of a dispute in the Gemara in Gittin, between Rav and Shmuel on one side and Rabbi Yochanan and Reish Lakish on the other:
Rav and Shmuel: "With a document" means a document that contains a lien on property - in which it is written that if the loan is not repaid, the lender may collect from the borrower's land. "Without a document" means that there was in fact a document, but that document did not include a lien on property, that is, it did not encumber the borrower's land for the loan. And an oral loan, a verbal loan with no documentation at all, is certainly released and cancelled by Shemittah.
Rabbi Yochanan and Reish Lakish: "With a document" is to be taken literally - a loan for which a document was written and recorded. "Without a document" is an oral loan. But a document that contains a lien on property, in which it is actually written that the borrower mortgaged his property for the loan, is not released by the Shemittah year.
"Hakafas hachanus einah meshammetes":
Credit that a person has at a store is not released. This is how the storekeeper would run his business, and it can still be seen today in a grocery store in Israel: a small box holding cards with the names of the people who buy on credit. Credit of this kind is not considered a loan but rather an ongoing line of credit, and it is not a formal loan that would be released by Shemittah.
"Umah asah milveh, harei zeh meshammet":
If the storekeeper and the customer settled the debt between them - totaled up all the purchases and recorded them as a loan - then the debt is subject to the laws of the cancellation of debts and is released. Some understand that the way to turn store credit into a loan is by setting a date for repayment.
Rabbi Yehudah says: "Harishon rishon meshammet" - each time a person makes a purchase on credit, the previous credit becomes a loan, and therefore it is released. The earlier purchases made on credit are thus released by Shemittah, and only the most recent purchase is not subject to the laws of the cancellation of debts.
"Schar sachir eino meshammet":
If an employer owes his worker money for his wages, the debt is not released. But "im asa'o milveh, harei zeh meshammet" - if they turned the debt into a formal loan, it is subject to the laws of the cancellation of debts.
Rabbi Yosei says: "Kol melachah shepose'kes bashevi'is - meshammetes". In other words, according to Rabbi Yosei, the rule that a worker's wages are not released depends on the type of work:
Work that stops during the Shemittah year: if the wages were for work that may not be performed during the Shemittah year, then at that moment the work came to an end and the worker is entitled to his money. The debt has the status of a loan, and therefore it is released.
"She'einah pose'kes bashevi'is - einah meshammetes": if it is work that continues even during Shemittah, because it is permitted to perform it, we do not view the debt as a loan but as a worker's wages that are still accumulating. And since the wages are still accumulating, the debt does not have the status of a loan and is not released.
In summary: in this Mishnah we learned that the Shemittah year releases a loan whether it was made with a document or without a document, and we examined the dispute between Rav and Shmuel and Rabbi Yochanan and Reish Lakish in defining "with a document" - a document containing a lien on property, or a document in the literal sense. We also learned that store credit and a worker's wages are not released unless they were turned into a loan; the view of Rabbi Yehudah that "the first one is released each time"; and the view of Rabbi Yosei, who distinguishes between work that stops during the Shemittah year, whose wages have the status of a loan and are released, and work that does not stop, whose wages continue to accumulate and are not released.