In collaboration with Zap Legal
"Those who fall into large debts of hundreds of thousands of shekels often feel as if they are in a lost situation that cannot be got out of, but this is simply not true. There is a lot to do and quite a few ways to write off huge debts and embark on a new path," says Adv. Yifat Ben David -Bostus, who accompanies many debtors who have run into difficulties and helps them get out of the mud.
According to her, a skilled lawyer, well versed in everything related to insolvency, knows how to deal with the complexity involved in huge debts.
"But even before that, it is better to avoid this situation and not neglect the handling of debts," says Adv. Ben-David-Bostus.
Did you receive a notice from a creditor or a lawyer about a debt?
"Hurry up to take care of him," she recommends.
"Do this before the debt accumulates interest and linkage and before it rolls into lengthy and expensive legal proceedings. It is better to 'kill' the debt when it is still small, without getting into unnecessary complications."
The fast track: a haircut for municipalities and banks
If you have already entered the pit and you feel that you have lost control and will not be able to repay all the debts, one way is to try to talk to the creditors and ask them to reduce the amount of debt.
You’d be surprised, but lawyers who specialize in the subject manage to get defendants to waive exorbitant debts in intensive negotiations.
"In many cases, large entities that owe money, such as municipalities or banks, are willing to go a significant way toward the debtor and waive a large portion of the debt, provided they receive a significant portion of the amount immediately," says Advocate Ben-David-Bostos.
"In order to move forward, it is sometimes necessary to raise an amount that will be paid to the creditor through friends or family members and will allow a much larger debt to be written off and unnecessary mental stress, the consequences of which on the health condition are clear."
Insolvency: enter into supervision and embark on a new path
Another path in which many debtors are marching is to resort to an insolvency proceeding.
In this proceeding, all claims and enforcement proceedings against the debtor are stopped, and he enters into a regime of strict supervision on behalf of an official appointed to him by the court.
The debtor is required to report his income and expenses and pay the creditors' fund a monthly amount set for him.
The advantage of this route is that it has a horizon.
Within a year, a legal hearing can be scheduled in which a repayment plan will be required.
That is, how much money he will be required to pay in order to eventually get fired, which will result in the cancellation of the balance of his debts and allow him to embark on a new path.
Such a procedure should take up to four years, at the end of which you will be released from the debts.
It should be noted that in some cases and in justifiable circumstances a dismissal will be given immediately, so for example in a case where the debtor is unfit and unable to work at all and creditors cannot be repaid.
The direct route: to obtain a comprehensive settlement in court
Another way to write off large debts is to try to reach a comprehensive debt settlement in court without going bankrupt.
That is, try to reach agreements with most creditors on paying part of the debt amount.
It should be noted that this way entails reaching an agreement with most creditors, who hold three-quarters of all debts.
Once agreements have been reached with all creditors, it is necessary to approve the settlement in court, which again again allows for the eventual cancellation of large debts.
Another option is to request consolidation of portfolios, which will make it possible to spread the debt into payments and also pay them centrally to all debtors.
"It should be noted that it is not always possible to consolidate all the cases against the debtor," says Adv. Ben-David-Bustos.
According to her, before setting out, things should be examined in depth in order to choose the appropriate route to charge, in a way that will ultimately benefit him and allow him to embark on the new path.
"To do this," she says, "one should try to understand what the amount of the debt is and how much of it you can repay."
Advocate Ben David-Bustus concludes: “The goal is to find a sixty end solution to all the debts, and not just to some of them.
Beyond that, one should try to understand whether the debtor got into trouble due to a one-time event or due to problematic economic conduct that is inherent in it and requires in-depth treatment. "
Have you run into heavy debts and you want to get out of the pit?
Need guidance in insolvency proceedings or in conducting negotiations with creditors? Contact Adv. Yifat Ben-David-Bostus for initial advice on the subject.
Adv. Yifat Ben David Bustos deals with other areas of commercial civil law, drafting agreements and contracts in the field of real estate, drafting wills and continuing power of attorney.
For contact and additional details, please call 053-6110332
on the firm's website
In collaboration with Zap Legal