Canceling the Foreclosure of an Apartment – How Is It Done? (Legal Information)
What do you do if you find out that foreclosure was imposed on your most valuable property – an apartment or house that you own? This is a very legally complex situation and, to properly deal with real estate foreclosure, it is very important to understand what legal solutions are available to you by law. A lawyer from our firm specializing in execution law and civil law explains about this here in detail.
Our law firm, which has branches in Jerusalem and Tel Aviv, specializes in bankruptcy and execution law, as well as various branches of civil law. Our firm provides comprehensive legal assistance to individuals and businesses on issues such as representation of debtors before the courts and execution officials, requests for cancelling foreclosure, and requests to have one asset foreclosed in place of another.
Apartment Foreclosure – It Can Happen to Anyone
Imagine the following painful situation: One morning you discover that your home is no longer in your control. Because of debts that you have accumulated, your creditors caused the control of the house to be taken away from you for a certain or unknown period of time. Actually, this is not an imaginary situation. It is exactly what happens when your home is foreclosed. There are several legal ways to cause foreclosure of an asset. Each of them has different rules, which are important to understand when preparing to deal with this difficult cumbersome situation.
Who Is Entitled to Impose Foreclosure On an Apartment?
Aside from the fact that there are several legal ways to impose foreclosure, there are a number of entities that are entitled to request foreclosure. Foreclosure may result from a debt to an individual creditor, a corporate creditor, or State authorities (municipalities, tax authorities, government ministries, etc.). In the case of a debt to State authorities, it is important to know that the authorities are subject to special rules that allow them to impose foreclosure directly, and these rules are expanded upon below.
What Can You Do If Your Apartment Is About to Be Foreclosed?
The most important thing that you need to understand when your apartment faces foreclosure is what type of foreclosure was imposed. There are actually three main types of foreclosure: The first type is temporary foreclosure imposed by the court. The second type is foreclosure by the Writ of Execution in place of an unpaid debt. The third is a foreclosure by the municipality or one of the State authorities. Each of these types of foreclosure has different characteristics and purposes. The courses of action for cancelling each type of foreclosure are different, depending on the case. Therefore, it is important to understand the differences between the different types of foreclosure.
Foreclosure by Court Order
The court may impose foreclosure of an apartment in civil lawsuits, in accordance with the Civil Procedure Regulations. This is usually done in financial claims. The foreclosure in these cases is usually intended to ensure that the defendant receives compensation upon completion of the proceedings. Hence, it is not intended to be a punitive measure, but a kind of “insurance” for the plaintiff’s money. It is also important to know that the person or entity requesting the foreclosure is required to notify the Land Registrar of the apartment foreclosure.
A possible way to cancel the foreclosure in these cases is to try to reach an understanding with the plaintiff under a partial or full settlement agreement, in a manner that will lead to the cancellation of the foreclosure. If this is not possible or relevant, there is another procedure that allows the defendant to go to court and request the foreclosure to be cancelled. Alternatively, it is possible to request foreclosure of another asset in place of the apartment. This procedure is explained in detail in another article published on our website.
Foreclosure by the Writ of Execution
In writ of execution proceedings, the Execution Office registrar is entitled to order that debtors’ assets, including an apartment, be foreclosed. Here, too, the purpose of the foreclosure is usually to ensure repayment of the debt to the claimant (referred to in writ of execution proceedings as the “winner”). However, unlike temporary foreclosure imposed by the court, here the apartment may be sold in an auction to repay the debt.
There are several ways to deal with foreclosure of an apartment by the Writ of Execution. First, here, too, you may try to reach an agreement with the other party and spread out the payments in a way that will allow you to repay the debt without having your property foreclosed. Another option is to request cancellation or delay of the proceedings and restrictions imposed on you as a debtor by the Writ of Execution. This request is submitted to the Execution Office registrar. If the request is denied, the registrar’s decision may be appealed to the court. There is also a third option that may be relevant: Foreclosure of an apartment usually results from particularly high debts, a situation that may justify considering the initiation of bankruptcy proceedings.
Foreclosure by the Authorities in Administrative Debt-Collection Proceedings
In some cases of debts to State authorities (such as the tax authority, municipalities, and local authorities) due to taxes, fees, or arnona (property tax), authority officials are authorized to impose foreclose on the debtor’s apartment, usually under the Tax Ordinance (Debt Collection) or the Municipal Corporations Ordinance. Although this type of foreclosure is similar to a temporary foreclosure imposed by the court (in the sense that it is intended to incentivize the debtors to repay the debt), in this case it is not imposed by a judicial body. This may lead to various errors that justify annulment of the foreclosure. For example, after a long period of time during which the debt was not returned, it may no longer be legally possible to impose foreclosure.
Exactly for these cases, the Attorney General compiled guidelines that enable foreclosure despite the circumstances. These guidelines are intended to help the authorities take care to enforce the foreclosure in the right manner. Among other things, the guidelines require the authorities to examine possible alternatives to enforcing the foreclosure themselves (such as collecting the debt through the Writ of Execution or by a court order). They must also consider postponing debt collection in certain cases, such as a difficult economic or health situation, or a situation in which severe damage will be caused if the property is foreclosed. The guidelines illustrate the high likeliness of error when foreclosure is imposed by State authorities. Accordingly, it is advisable to consult a lawyer in these cases, who will be able to carefully examine your case and the ways to deal with it.
Legal Advice and Assistance Regarding Apartment Foreclosure, by a Lawyer Specializing in Execution Law and Civil Law
In summary, there are different types of apartment foreclosure, and for each of them there are different ways to request cancellation or take legal action on the matter. For any individual question or need of assistance, you can contact us and a lawyer from our firm will be happy to help. Our law firm specializes in execution law and civil law, and is very experienced in providing legal assistance to debtors regarding foreclosure and what to do about it.