To answer we have to start from the beginning. The Torah says in Devarim (Chapter 15, verses 1-2) “at the end of seven years…every creditor should release his authority over what he lent his friend.”
The observance of Shemittah is not only resting the land of Israel, but also forgiving all debts. Any loan not paid at the conclusion of the Shemittah year is cancelled. This is referred to as Shemittas Kesafim.
The Torah continues: “beware lest there be an unfaithful thought, the seventh year is approaching and you will hold back from helping your needy brother and not give him… you should surely give him… G-d will bless you [15:9].”
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