Insolvency: An unusual case received significant debt reductions
The following story is not encountered every day in the world of law, since when it comes to insolvency and real estate, the cases are quite routine and debtors do receive reductions here and there, but not such significant debt reduction as you will be exposed to in the following lines, and the main thing: all parties are satisfied
In collaboration with legal zap
02/10/2022
Sunday, 02 October 2022, 13:50
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Insolvency is a complex procedure, especially for those who previously ran a business, but on the other hand, it is possible to reach a proper debt settlement with a number of correct moves (Photo: ShutterStock)
Insolvency proceedings are no small matter.
This is a complex procedure, especially for those who previously ran a business, but on the other hand, it is possible to reach a proper debt settlement with a number of correct steps.
What is important is to do it skillfully, with wise conduct in front of the bodies related to the issue.
Insolvency proceedings are opened after receiving an order to open proceedings submitted by the Commissioner to the Magistrate's Court.
The request for an order to open proceedings is usually submitted by a debtor (individual request, according to the language of the law) whose debts to his creditors exceed the amount of NIS 150,000, but the procedure can also be opened at the initiative of a creditor.
The debtor we are talking about is a man in his sixties, divorced and the father of two adult daughters.
For many years he ran a solar boiler repair business with his brother, with whom he got into a financial dispute.
Later, when his relationship with his wife went awry, he found it difficult to work and began to suffer from diabetes, blood pressure problems and high cholesterol.
Finally, the debtor left the shared residence, stopped working due to his deteriorating health, and the burden of raising the girls remained on his ex-wife for many years.
However, the residence remained registered in the name of both spouses and many foreclosures and encumbrances began to accumulate on the debtor's rights, especially from the tax authority and the local authority.
This is a case that included many creditors, including the tax authorities, a local authority from the central region, social security and private creditors.
When the request was submitted, the debt balance was estimated at approximately NIS 1.3 million.
After the case was opened, the lawyer who represented the debtor contacted an accountant in order to work with the tax authority to reduce the debts and fines accrued to the debtor.
The enormous debts recorded in the authority's registers were determined according to the best of judgment due to the failure to submit reports for years. The accountant provided the tax authority with medical certificates regarding the debtor's condition during that period, submitted retroactive reports on his behalf and canceled the fines imposed.
Following the above actions, they were reduced by about half NIS 1 million from the Tax Authority system and the debt to them was about NIS 100,000.
The dealings with the authority led to the removal of the VAT lien on the debtor's rights in the apartment and a very optimistic situation began to emerge.
Debt reduction not paid.
The examination of the National Insurance debt claims led to another significant reduction.
Also, the local authority, for which it was declared that there was a debt amounting to hundreds of thousands of shekels, did not file a debt claim on time, and when it was rejected, the authority did not appeal the decision.
The result was a reduction of hundreds of thousands of additional shekels from the case.
Towards the end of the procedure, a sales transaction was made between the debtor and his ex-wife, in which his rights in the apartment (half) were sold, with the proceeds being directed to the collection case in such a way that a 100% dividend was paid to the creditors plus the trustee's fees in the procedure, and a total of approximately NIS 270,000.
The move cleared the possibility of removing all the foreclosures and encumbrances that were attached to the debtor's rights in the apartment and enabled the completion and transfer of the rights in the name of his ex-wife.
Equally important, the debtor was discharged from all the debts he had, thus allowing him to continue living his life without the past debts that haunted him.
The debtor will be represented in the proceedings by attorney Oz Radie, who deals in the field of real estate and insolvency. His office provides a comprehensive package of legal services in the civil and real estate field, insolvency, wills and inheritances, representation of tenants in urban renewal projects and more.
For more details and to contact the law firm of Oz Radie & Co., you can contact here or by phone
- 077-2314230
to the firm's page on the Laws website.
The article is courtesy of Zap Laws. The
information presented in the article does not constitute legal advice or a substitute for it and does not constitute a recommendation for taking procedures or avoiding procedures. Those who rely on the information in the article do so at their own risk
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