Foreclosure Problems: This is how you successfully deal with salary foreclosure
With the cancellation of the file consolidation institution, the person whose salary is foreclosed may apply for the opening of a bankruptcy procedure. Here's how to do it right
Debts (Photo: shutterstock)
Divorce in divorce proceedings (Photo: ShutterStock)
N. went to the ATM, as many times before, and tried to withdraw money. The card was swallowed. He was certain that this was a technical mistake and was annoyed at the bank and his bad luck, but a short inquiry in front of the bank's office revealed that he was in exceptional circumstances because his salary was foreclosed. N. is not the only one. What to do in this case?
In September 2019, the Insolvency and Economic Rehabilitation Act came into effect and revolutionized the lives of many debtors. The new law replaced the bankruptcy ordinance and was intended to allow debtors economic rehabilitation and reintegration into economic life.
Among other innovations he brought with him, the new law abolished the 'file consolidation' procedure that allowed debtors who were unable to meet the repayment of debtors to apply for consolidation of their debts and thus pay only one party, rather than each creditor individually. After consolidation and payment arrangement, the debtor could apply for cancellation of foreclosures imposed on him, including foreclosure.
Today, the lender is still able to apply for portfolio consolidation, there are several ways to deal with the foreclosure issue. Among other things, you can request a payment order in the execution case in which the foreclosure was imposed, contact the creditor directly and reach an individual settlement or apply for insolvency proceedings.More in Walla! NEWS More in Walla! NEWS
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Who may apply for insolvency proceedings?
A debtor whose total debts range from NIS 150,000-50,000 may file an application for the opening of insolvency proceedings. When the total debt exceeds NIS 150,000, the case will be transferred to the Magistrate's Court.
At this stage - between filing the order and opening the insolvency proceedings - the proceedings are not automatically frozen, but it is certainly possible to make a special request to delay the proceedings until the requested order is issued. The application must be submitted to the party discussing the request to open the proceedings, or the procedure is underway (court, center for collection of fines or execution).
Approval of the request to open proceedings
If the application is a debt of NIS 150,000-50,000, insolvency proceedings will be conducted in the unit dealing with the issue in the debtor's residential district. Upon receipt of the application, the debtor will be notified of the file number and the name of the attending bureau, and, as appropriate, will be asked to complete such and other documents. When the application is valid, it will be submitted for examination by the insolvency registrar. If the Registrar confirms that everything is in order and that the debtor does in fact fulfill the conditions for the opening of the proceedings, the insolvency registrar will contact the creditors and the debtor and try to establish an agreed payment arrangement on all parties.
Creditors' meeting and proceedings
The Insolvency Registrar (Execution Registrar), of course, seeks to formulate a payment arrangement that will be agreed upon by creditors and debtor alike, but not often the proposal that is drafted is not agreed on by all parties involved. In such a case, the registrar can try to schedule a creditors' meeting and reach a payment settlement. If this is not possible even in the context of the creditors' meeting, the Registrar will issue the decreed order and order the insolvency procedure to be opened.
At this stage the proceedings against the debtor will be frozen and the various foreclosures will be canceled, including the foreclosure of the salary. At the same time, the debtor will be subject to various restrictions such as delaying exit from the country, restriction on the use of debit cards and more.
Debt Court treats over NIS 150,000 debt (Photo: shutterstock)
Illustration (Photo: ShutterStock)
A salary bend is not a cut from the sky
Salary foreclosure is an extreme step that can seriously hurt debtors. The best way to deal with such a step is to contact an attorney representing the executor without delay. A well-trained lawyer can provide all the information he needs to make an informed decision about the most appropriate way for him to act. For example, if the decider must apply for insolvency proceedings, the application must be submitted in the most professional way so that its handling is not delayed due to incorrect registration or lack of documents.
In addition, the law prohibits foreclosing the full salary. The level of the exemption varies according to various parameters such as the debtor's marital status and income level. The lawyer's job is, among other things, to ensure that the law is respected and the curved amount does not exceed the law allowed.
In addition, the repayment period in the insolvency proceedings is usually four years. It is important to know that in certain circumstances, the period can be significantly shortened or extended. The lawyer's job is to formulate the debtor's financial entanglement circumstances so that he can enjoy the shortest payback period that suits him and the lowest possible repayment amount.
Attorney Odelia Mashalmi, of the Cohen, Decker, Fax office, head of the insolvency department (formerly bankruptcy) and executor.
The article was written in collaboration with a legal zap website
The information presented in the article does not constitute or replace legal advice and does not constitute a recommendation for taking proceedings or avoiding proceedings.
Anyone who relies on the information contained in the article does so at his own risk.