Our office handles all aspects of insolvency and bankruptcy in Israel, including the representation of debtors and creditors. Many of the clients, individuals or companies, who contact us are in debt and need help handling the resulting foreclosures and restrictions. These debtors require an expert’s help in finding a way resolve their debts and get a fresh financial start.
We know, and are often told by our clients, that life under the burden of debt is not easy, to say the least. The various collections procedures that can be carried out against these debtors include the confiscation of their vehicle, salary foreclosure, bank account foreclosures, and other various third party foreclosures.
Thus, it is important to be proactive and take action soon, before actions taken by creditors start to affect you. With the assistance of a lawyer who specializes in insolvency, you can settle your debts and turn a new page.
The new Insolvency and Financial Recovery Law – Enacted in 2019
As of very recently, in September 2019, the Insolvency and Financial Recovery Law came into effect. This law revolutionized insolvency procedures in Israel, which had previously been regulated under the old bankruptcy ordinance.
What is the Intent of this New Law?
The new law is designed to permit debtors who – in good faith and with no ill intent – incurred debts which they cannot repay, to take action in repaying their debts to the creditors as much as they can. At the conclusion of the process, the debtor receives the possibility to begin their life anew without any past debts trailing behind. They can thus return to normal financial functions as a regular rehabilitated citizen.
The New Law Stipulates a Differentiation Between Debts Lower and higher than ₪ 150,000
The amount of the debt determines who has the authority to rule on the insolvency procedure. In any case, the minimum amount to submit an insolvency request is ₪ 50,000. A request from a debtor whose debts are lower than ₪ 150,000 will be decided on by the Law Enforcement and Collection System Authority. On the other hand, a request from a debtor whose debts exceed ₪ 150,000 will be decided on by the Commissioner for Insolvency and Financial Recovery Proceedings, in the appropriate court.
Who Can Submit a Request to Begin Insolvency Proceedings?
An application to begin insolvency proceedings can be submitted by the creditors who want to prevent the debtor from smuggling assets and accomplish the repayment of the debts, or by the debtor himself, who is not capable of paying the debts, thus requesting to begin the insolvency proceeding before further developments.
The Process of Representing Debtors in Insolvency Proceedings Until Receipt of Financial Recovery Order
Our office accompanies debtors who want to enter into insolvency proceedings, beginning from the moment the request is submitted all the way until receipt of an order to begin proceedings, as well as continual accompaniment, until an financial recovery order is granted. This order is decided by the court which also determines the debtor’s repayment plan. As long as the debtor is in compliance with the financial recovery order, they will be entitled to receive an order of discharge from the past debts which they cannot repay.
During the procedure, the debtor will be required to pay monthly installments according to their financial ability. They must also comply with additional requirements and restrictions, and report to the trustee’s office accompanied by our office.
In addition to the options mentioned above, there are other ways to settle the debt, including a creditors arrangement.
What About Debtors with Less Than ₪ 50,000 in Debt?
If you have debts amounting to less than ₪ 50,000, we can assist you in settling the debt directly with the Law Enforcement and Collection System Authority or with the creditors, in installments that match your financial capacity, until the debt is repaid.
You shouldn’t wait until the debts inflate and collection procedures are carried out against you. Instead, you can settle the debts before case files ever are opened against you. As a worst case scenario, you should start working to settle your debts immediately after receiving a warning from the office of the Law Enforcement and Collection System Authority. In this respect, we can also file objections for you in accordance with the type of debt you have. For instance, in terms of executing promissory notes / checks we can file an objection to the promissory note or check, or we can assert that it was a fraudulent claim.
Representation of Creditors – Assistance from a Lawyer in Collections Process
Our office also represents creditors who are not able to collect money from the debtors. We can help start proceedings for a writ of execution and insolvency against the debtor and collections proceedings, or help facilitate an existing procedure in order to preserve the creditor’s rights.
Contact a Lawyer Specializing in the Area of Insolvency / Bankruptcy
Whether you are the creditor or the debtor, an individual or company, it is important to consult with a lawyer who specializes specifically in insolvency and bankruptcy law. Our attorneys will advise you in the most appropriate way of handling your debts or creditors.
The lawyers in our office are very experienced in this matter. Don’t try and handle these things on your own, contact us today for a consultation.
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