Sentence
additional subjects
"A debtor who does not take responsibility has no place in bankruptcy"
The court annulled the bankruptcy proceedings of a debtor who had accumulated debts of NIS 3.7 million.
The reason: he did not take advantage of the many opportunities given to him and acted in bad faith
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Bankruptcy
Adv. Yifat Ben David Bustos, in collaboration with Zap Legal
Monday, 09 August 2021, 15:30 Updated: 16:53
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Judge cancels trial (Photo: ShutterStock)
The Haifa District Court recently ordered the cancellation of bankruptcy proceedings against a debtor, which was conducted in bad faith and in the absence of transparency.
In the ruling, Judge Ayelet Dagan made important rulings regarding the conduct expected of a person who wishes to be declared bankrupt.
"Bankruptcy proceedings are expensive proceedings that are mostly funded by the public coffers," the judge noted in the ruling.
"A debtor who does not discharge the obligations imposed on him by virtue of the proceeding and does not assume the full responsibility expected of him, has no place in bankruptcy," she ruled.
"The debtor did not tell the truth about his mother's estate"
The debtor has accumulated huge debts amounting to almost NIS 3.7 million to 38 (!) Creditors. Despite the extent of his debts, he was charged a minimum monthly payment of only NIS 500. The debtor sought to declare him bankrupt, but the special administrator for his assets objected and demanded that the proceeding be canceled.
According to the director, throughout the procedure the debtor acted in bad faith, did not pay for many months the minimum payments he undertook to transfer to the convention fund, and did not act transparently. Among other things, he claimed that the debtor did not tell the truth regarding the estate of his mother who passed away.
During his interrogation, the debtor claimed that his mother, who died a few years ago, sold her house near her death, and it was his sister who took care of it. According to him, the mother's house was sold for $ 60,000, with him and his sister each receiving NIS 20,000, and the rest of the amount was used to cover the mother's debts.
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However, the special administrator ruled in a report concluding to the court that this version was incorrect. the share of the estate, and signed an affidavit confirming that.
the special manager stressed that the debtor did not even revealed that his mother was additional property except for the apartment, and the legacy that included gold jewelry, money accumulated in the accounts at Bank Hapoalim and Bank Discount House located at a different address than the one reported by the debtor.
"Arrears of thousands of shekels in payment of debts"
As part of the procedure, he was given a large number of opportunities to present the documents he was required to present by the special administrator and to pay the arrears he had accumulated in the amount of thousands of shekels, but he did not comply.
The debtor explained this with various medical problems he suffered from and the passage of time that made it difficult for him to produce some of the documents, for example regarding a business he operated. Due to his failings in the proceedings, and due to discrepancies discovered in his investigation, the judge decided to cancel the bankruptcy proceedings.
"An examination of the debtor's conduct in the proceedings shows that he is not relinquishing the financial responsibility that this proceedings seek to promote in his case," the judge noted in her decision. "A debtor who enters the gates of the procedure is protected from his creditors, but in return he must meet his obligations to the proceedings fund and lead a legal lifestyle that strikes a balance between his needs and those of his creditors."
"Bankruptcy proceedings," the judge continued, "are expensive proceedings that are mostly funded by the public coffers. Therefore, he must not discharge the obligations imposed on him by virtue of the proceedings and does not take on the full responsibility expected of him, he has no place in it," she concluded.
* Attorney Yifat Ben-David Bustos specializes in bankruptcy proceedings and insolvency and accompanied by many debtors, and also engaged in tax law and family law and inheritance law, including wills and power of attorney ongoing.
The writer did not represent either party in this proceeding.
Locate Mr. Bustos and details More >>
Phone: 053-6110332
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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