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Making an order: the "new" insolvency law

Hundreds of articles have been written on the subject which have been explained from different directions, but what does the new insolvency law really stipulate and what options should be owed which fails to repay its debts?

All the information in the article in front of you

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• Insolvency

Adv. Nathaniel Amuyal, in collaboration with Zap Legal

Wednesday, 04 August 2021, 11:21 Updated: 11:29

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What exactly does the law say and when is it enforced?

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In 2018, the "Insolvency and Economic Rehabilitation Law (2018)" was enacted, which carried out a comprehensive series in all areas of solvency law, whether by individuals or companies. From that day on, they are included together under the same umbrella of the law economic development.

In fact the law is the renovation of the bankruptcy Ordinance which remains in force until the enactment and provides a comprehensive reform in the field. the law seeks to allow a person or business went bankrupt recover, get a second chance to start over.

goals law

law of insolvency enacted to create a rule for all law Insolvency and legal certainty as to the various options available to the debtor.The law allows the debtor to recover financially, to open a new page through an arrangement which will both be in line with his financial situation and also take into account the interests of his creditors.

In addition, the law is intended to shorten procedures - an insolvency procedure will begin and end within a four-year period, thus allowing the debtor to start in a new way as early as possible.

For further reading by Adv. Amuel:

Signing a guarantee - what protections does the law offer?

Insolvency proceedings under the new law The new

law regulates insolvency proceedings and in fact divides them into three stages: the opening stage of proceedings, the interim period stage and the economic rehabilitation stage. The opening of proceedings is locked by three powers depending on the debtor's debt situation.

Opening the procedure with the appropriate authority

In the first stage, the debtor will apply to the appropriate authority to initiate insolvency proceedings. The new law has made an order in the powers and therefore, the amount of the debtor's debts is what determines with whom the procedure will be opened.

Debtor in a total amount of up to NIS 150,000 - The Enforcement and Collection Authority

This debtor according to the law, whose debts do not exceed a total of NIS 150,000, can initiate insolvency proceedings in the Enforcement and Collection Authority before a designated Execution Registrar, and not before the Commissioner (receiver Official assets).

For this purpose, six new units were opened: Tiberias, Haifa, Kfar Saba, Tel Aviv, Ashkelon and Jerusalem, and the debtor must contact the bureau near his place of residence or his main place of business.

The Registrar of Execution has in fact been given extensive powers and can grant a discharge order to the debtor in appropriate cases after a debt settlement.

Debtor with a debt of NIS 150,000 or more - the official receiver.

In this case, the insolvency proceedings will be opened with the official receiver (in charge of insolvency and economic rehabilitation proceedings) and will be conducted there.

Judicial power - Magistrates 'Court The Magistrates

' Court is the owner of the matter for the management of insolvency proceedings of individuals.

Insolvency proceedings of corporations continue to be conducted in the District Court.

Where do you turn in any situation?

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Issuance of a procedure order

About thirty days after the filing of the application for an insolvency order, a procedure order is issued. Upon the issuance of the order, the appropriate authority will appoint a trustee for the debtor's insolvency proceedings and the interim period will begin until the issuance of the order for economic rehabilitation.

Interim period - restrictions on the individual

After the appointment of the trustee, an interim period will begin. The interim period stage is in fact a probationary period, during which the trustee examines the debtor's financial situation and the possibilities and circumstances to reach a settlement. During this period, the individual will be restricted in various forms:

- Restrictions on account management - the debtor will be restricted in banks in Israel, that is, he will not be able to receive checks and will not have an overdraft facility. This is in order not to accumulate new debts.

Credit restrictions - the debtor will not be able to hold a credit card in the interim period.

- Delay in leaving the country - the debtor will not be able to leave the country during the entire period until receiving a dismissal.

Restrictions on Ownership in Business - The debtor will not be able to acquire ownership of a business or open a business.

After the interim period - a program for economic rehabilitation.

After the interim period, the Trustee is required to submit an account to the Commissioner. The Commissioner will issue an order for the economic rehabilitation of the individual. The plan will include the debtor's payment order, the assets to be included in the oblivion fund and the manner of their realization, as well as the terms and conditions that will apply to the debtor during the period so that he can be fired at the end. The plan takes into account the funds that should remain with the debtor for his basic needs and for his livelihood.

If the debtor meets all the conditions and completes the plan and order as determined for him, he will be entitled to be dismissed and restarted at the end of the proceedings. This is usually a period of three years from the receipt of the order until the receipt of the dismissal. Also, if it is found that the debtor has no ability to pay his debts, he will be exempt from them immediately.

The new law also gives debtors participation in financial training workshops, who can learn about proper financial management and not get into debt again after receiving the dismissal.

Creditors 'Arrangement

Another option to get rid of the debtor's debts is to reach a creditors' arrangement with his creditors. This can be done even before filing for insolvency and thus save the procedure. Another option is for the trustee during the interim period to examine the feasibility of reaching a settlement with the creditors. The arrangement is of course with the consent of the creditors and can save the debtor the procedure.

In conclusion

The new insolvency law has several purposes: to shorten and streamline insolvency proceedings, to unify the proceedings under a single legislative roof, to bring about the economic rehabilitation of the debtor.

Under the law, there are clear options to charge regarding how to repay his debts, and he has the option to start a new page in his life through the procedural order and making the payments accordingly.

Advised to contact an attorney specializing in bankruptcy law in every state of the financial difficulties that could lead to insolvency in order to try and avoid the procedure for example using an arrangement with creditors or to open the proceedings and to dispose of the debtor's obligations soon as possible.

Attorney Nathaniel Amouyal specializes in insolvency Repayment and economic rehabilitation of debtors.

Phone: 077-2314637

Article courtesy of Zap Legal The

information presented in the article does not constitute legal advice or a substitute for it and does not constitute a recommendation for taking proceedings or avoiding proceedings.

Anyone who relies on the information in the article does so at his own risk

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