Thanks to professional guidance, the debtor received a fair repayment plan - voila! Sentence

"The Insolvency and Financial Rehabilitation Law applies both to an individual (debtor) (who is a private person) and to an individual who is a corporation" (Photo: ShutterStock)

Attorney Inbal Elosh, who specializes in real estate, family law and insolvency law (bankruptcy), explains at the beginning that the insolvency procedure allows an individual who is a private person or a business owner (licensed dealer or limited liability company) who have failed financially, to start a procedure in order to recover their obligations to creditors whether partially or fully.

At the end of the procedure, the individual will receive a discharge of his debts (deletion of debts) on which he declared, while the company will have, according to the procedure it opened, to go through one of two things - financial rehabilitation and continued functioning or liquidation of the company and recovery of its debts as far as possible.

"The first and most basic thing is that a debtor is no longer defined as a debtor but as an individual out of a desire to preserve the dignity of the person caught up in the procedure.

"In addition, the idea underlying the insolvency law, which replaces the bankruptcy ordinance as mentioned above, is to cast a new content for the insolvency procedure which there In front of the eyes of the legislator is the rehabilitation of the individual (debtor) at the same time as the discharge of the debts to his creditors.

"As part of the concept of rehabilitation of the individual, the legislator paced the individual's time in the insolvency procedure in order to give the individual a rehabilitation horizon. However, as mentioned, the legislator also put in front of his eyes the repayment of the debt to creditors and therefore set parameters for maximizing the repayment capacity of the individual. "Another difference is that the new

law It states that according to the extent of the debts, the trustee will be determined to hear the case, and the cases are no longer handled in the district court, except for company cases.

An individual whose debts are estimated at 161,000 shekels - his case will be heard before the registrar of the Hotzalp. An individual with debts over 161,000 shekels - his case will be heard before the Insolvency Magistrate's Court. A company's insolvency case will be heard before the district court only."

Also, "it is important to know," adds Attorney Elosh, "that the Insolvency and Financial Rehabilitation Law applies both to an individual (debtor) (who is a private person) and to an individual who is a corporation.

This, in contrast to the bankruptcy order which regulated the debt repayment procedure for an individual only,

"An individual or a company whose scope of debts exceeds the scope of their rights and it is not in their power to repay them".

"In the aspect of an individual who has failed financially, the parties that can file for insolvency of the individual are the individual himself or the creditor to whom he owes."

According to Attorney Elosh, if the request to open insolvency proceedings was submitted by the individual, he must meet one of the following two conditions: in the six months prior to submitting the application - or at the time of submitting the application - the individual's center of life is in Israel or he owns assets or businesses in Israel at the time of submission the request

To the extent that the request to open insolvency proceedings was submitted by a creditor against an individual, the creditor must meet the following conditions: the amount of the debt is at least NIS 80,618.22 (as of 2023);

The creditor gave the individual a demand for payment of the debt;

In the demand it was stated that if the debt is not paid on the date specified in it;

The creditor intends to submit an application for opening insolvency proceedings;

The debt is not paid within 45 days from the date of delivery of the demand;

The creditor submitted the request within three months from the date he gave the individual the payment demand.

Incorrect legal support led to a lengthy process without a repayment plan.

One of the cases that came to Attorney Elosh's office in the past year was that of an individual who began the process almost three years ago, and during the entire period was accompanied by an attorney on his behalf, in a manner that did not match the circumstances of the individual's entanglement

. The circumstances of the entanglement were complex and even included the management of companies abroad, and since they were not properly presented to the court to the trustee and the trustee, the only one found himself after three years in the process without a repayment plan and when the cancellation of the proceedings was announced hanging over his head," says Attorney Elosh. "From the moment they came to

me , I worked for the individual, for the trustee, the supervisor and for a court in full cooperation.

My work included removing the individual's mistakes in full and presenting the circumstances of the entanglement and his financial situation in the most accurate and correct manner.

For this purpose, I created a new involvement affidavit with the individual, with all the circumstances of the involvement supported by documents on behalf of the individual as required," says Attorney Elosh.

The story of the entanglement was so complex that it took

Attorney Elosh almost two months to build the new affidavit with reference to the correction of the mistakes made from the beginning of the procedure by those who legally accompanied him in the procedure before it.

I made sure to pay all the arrears, and in fact I worked to correct the bad impression that was created on him. Later, I held a meeting in the trustee's office, clarified everything that needed clarification, and at the end of the day I appeared with the individual for a hearing in court during which I explained to the court why in my opinion a repayment plan should be built for the individual under the cancellation of the proceedings in his case, as requested by the supervisor".

At the end of the hearing, the court accepted the position of Attorney Elosh and ordered a sane and fair repayment plan for the individual, "which allows him", according to her, "to continue and provide for his family with dignity, and gives him a rehabilitative horizon in the end he will be discharged".

"The importance of legal professional support in this kind of procedure is directly related to the correct construction of the application that is submitted for approval by the supervisor, accompanying the individual in the procedure so that he complies with the provisions of the order, and maintaining continuous and open contact with the supervisor and the trustee to build a repayment plan, suitable for the individual's circumstances. "Alternatively, to convince the

court Because the plan that I propose as the strength of the individual under the plan proposed by the trustee and supervisor, is better because it matches the individual's dimensions.

This is so that, at the end of the day, he will be able to start a new page in his life at the same time as repaying his debts to his creditors to a different extent."

Attorney Elosh concludes: "It is important to say that there is no magic formula, and each individual and his circumstances is a world in itself and each case is examined on its own merits."

Contact

- 08-6230922

To the firm's page on the Laws website,

the article is courtesy of Zap Laws.

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