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Did the municipality activate aggressive collection? Here is a line you will love to hear - voila! Of money


Have you discovered that your bank account has been seized because of a disputed debt to the municipality, sometimes because of an alleged offense that occurred years ago? You will surely be happy to hear that the legislator limited the power of the municipalities

Did the municipality activate aggressive collection?

Here is the news you will love to hear

Have you discovered that your bank account has been seized because of a disputed debt to the municipality, sometimes because of an alleged offense that occurred years ago?

You will surely be happy to hear that the legislator recently limited the power of the municipalities, and this has many implications for what is allowed - and especially for what the local authority is not allowed to do in the collection process

Attorney Alex Katz and Gal Kostica, guest column


Tuesday, 09 August 2022, 12:22

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Even law-abiding citizens who are not prone to crime, often find themselves in an illusory situation: the bank account, the financial lifeblood of any person or business, is paralyzed due to a foreclosure - usually because of a municipal report that you were not even aware of its existence: now try to remember if seven years ago you parked, let's say , near the municipality of Givatayim - and you got a report, or maybe it's a car that you sold, but somehow it's still in your name in the archives.

The problem for most citizens is that, unlike the local authority that demands the payment - including interest, linkage, arrears fines and a fee for collection expenses through a lawyer (an amount that can reach thousands of shekels on an original debt of several hundred), is that the pressure to release the bank account from the foreclosure (the bank transfers automatically the amount required for the deposit, until the foreclosure is lifted), they sometimes prefer to pay and end the saga - even in cases where they have no idea if they committed the offense attributed to them (mostly parking, also a debt for property tax on a rented apartment she lived in years ago, "Machach" ).

Each municipal authority has two routes for debt collection in general, and property tax debt in particular: one - a civil collection route, that is, filing a lawsuit in court, and the other - the more "popular" route is administrative collection.

As part of administrative collection procedures, the Authority is given the ability to act by imposing garnishments on the bank's account (including confiscation), registering liens and even garnishing the debtor's home or business.

There is no doubt that this authority gives the authority enormous power and a diverse scope of action when it comes to collecting a debt.

For many years, there has been a legal dispute between the debtor citizens and the municipalities regarding debt collection.

While the municipality claims, for the most part, that there is no provision in the municipal ordinance that can prevent it from resorting to collection procedures, even if they are aggressive, even if it is a debt that is in dispute, the citizens claim that the municipality is prohibited from resorting to collection procedures regarding a disputed debt, and this in light of a proclamation The taxes (collection) - which is subsidiary legislation signed by the Minister of Finance and in which it is established that property tax is a tax whose collection can be applied the provisions of the Taxes (Collection) Ordinance.

Such controversies, which often reached the courts or appeal committees, received different and even contradictory decisions.

Last July, the Knesset passed the law to amend the Municipal Ordinance, which will enter into force in July 2023, which puts order in disputes and somewhat curbs the sometimes wild collection by the municipalities.

The most fundamental change of the amendment to the law states that a municipality will not be able to take enforcement actions when it comes to a debt for which the deadline for filing an appeal has not passed.

That is, if before the amendment a municipality could seize a bank account even if the 90 days that can be appealed had not passed, on the grounds that there is no provision in the municipal ordinance that prevents it from doing so, then now the municipal ordinance will be amended and a municipality will be prevented from collecting the debt or seizing funds.

This is an important step for the benefit of the citizen that will make it easier for him to substantiate his claim in the appeal, without fear that during this period the municipality will foreclose his bank account or send him foreclosures.

The municipality will no longer be able to arbitrarily decide with whom it renews proceedings (Photo: ShutterStock)

Attorney Alex Katz (Photo: Shani Nachmias)

Another fundamental change states that if three years have passed from the date the debt became final, but the municipality has not yet begun enforcement measures to collect it, it will not be able to begin collection, except with the approval of a committee for collection matters, which will be established by virtue of the new amendment and will include a number of senior municipal officials, including the treasurer, the CEO and the legal advisor.

Only the same committee can authorize the municipality to resume collection after this period of time. In other words: if I owe the municipality NIS 2,000 since July 2019 and I can no longer appeal it, but the municipality did not take any collection procedure until July 2022, then from that date From then on, it is prohibited from renewing the procedures (unless the new committee ordered otherwise).

This is an important step of transparency, equality and uniformity with the citizens, since the municipality will not be able to do anything and decide arbitrarily against whom it renews the collection procedure and against whom it does not, but a consideration will be applied An opinion that will prevent discrimination in collection, since it is obliged to publish on the website rules regarding collection in each route as well as payment arrangements.

Other changes added in the law amendment refer to the issue of sending the first demand for payment and then the demand before taking collection procedures.

This addition was also introduced in order to make it easier for the citizens so that they know clearly until when the debt can be paid before proceedings are taken against them.

All these amendments have broad implications for the collection procedures that many municipalities do with the help of external collection companies.

Those companies, which usually send bills to the citizens' homes, will be bound by the new law and will not be able to behave as they please.

The legislator did well to decide to curb the power of the local authorities and stated that the use of the collection will be measured, calculated, without using unnecessary force against the citizens, and most importantly - this will be done in full transparency and in an equitable manner.

Attorneys Alex Katz and Gal Kostica from the Katz Geva Itzkovitz (KGI) office, which specializes in municipal taxation

  • Of money


  • Municipalities

  • fine

  • parking

  • property tax

Source: walla

All business articles on 2022-08-10

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