What actually happened in Ancient Israel was: the market (and the society) worked around it. Creditors lent less money in the run-up to a Jubilee year, but once that had passed, they also came up with various religious/legal rationalizations/arrangements to allow them to effectively enforce debts.

The part I found interesting, and wanted to read more about, was the Golden Age of Islam, in which a financial and commercial system developed (in fact, developed free-market ideology) entirely without usurious debts of any kind.