Must be executed? The new section of the law that is important for you to know - voila! theorem

2023-05-28T03:30:46.001Z

Highlights: During the COVID-19 pandemic, the state allowed debtors to retire their debts, sometimes up to a period of seven years. As of February 23, this special section of the law is no longer a temporary order and is a permanent clause in the law. "The new procedure has many advantages, starting with the fact that it is a procedure for which there is no need to pay a fee," says Adv. Amiram Elkobi, who specializes in accompanying clients in insolvency and economic rehabilitation proceedings.

During the COVID-19 pandemic, the state allowed debtors to retire their debts, sometimes up to a period of seven years

"From the moment COVID-19 hit, people were allowed to retire their debt for up to seven years" (Photo: ShutterStock)

The rising cost of living and the effects of the coronavirus crisis have led many Israelis to a complex economic reality that makes their lives difficult. Some Israelis have sunk into debt, others have been forced to initiate insolvency proceedings, but most Israelis have something in common – they don't know that a special section of the law, approved during the coronavirus period, allows them to retire their debts for longer periods and often even actually helps their economic recovery.

Adv. Amiram Elkobi, who specializes in accompanying clients in insolvency and economic rehabilitation proceedings, explains that until the outbreak of the coronavirus, it was possible to retire the debt by execution for a period of only three years, but "during the corona period, debtors were allowed to retire their debts for a period longer than three years, and the broad retirement was approved for a limited time, as a temporary order only."

Adv. Elkobi adds, "From the moment the coronavirus broke out, people were allowed to retire their debt for up to seven years. Thus, debts up to NIS 100,100 can be retired for up to six years and debts of more than NIS 9,2 can be retired for up to seven years.

When both options are not suitable, there is also a third option, which is the process of insolvency and economic recovery. The real news is that as of February 23, <>, this special section of the law is no longer a temporary order and is a permanent clause in the law. However, "even though today this is a permanent clause regulated by law, not everyone is familiar with this possibility," notes Adv. Alkobi.

What is the advantage of this special section?

"The new procedure has many advantages, starting with the fact that it is a procedure for which there is no need to pay a fee. This is in contrast to an insolvency proceeding, for example, where there is a fee, there are expenses, usually there is the appointment of a state official who receives a salary from the debtor's file. With this new process, there are no appointments and additions or surprises, and the whole process is cheaper."

Adv. Elkobi adds: "I, as a lawyer, also have more certainty in this process and in less than a month there is already a result - both we and the clients know exactly how to start and how to finish, which means that it is possible to coordinate expectations more accurately with the client."

According to him, "Beyond the simple fact that as part of the new procedure, debtors are given the option to pay the debts with a longer retirement, the interest rates in the process are also very low and in some cases the retirement of the debts will be even without interest at all."

"The procedure is highly recommended to be done with the accompaniment of an experienced lawyer" (Photo: ShutterStock)

What does all this goodness cost?

"The costs we charge are less than a third or even less than a quarter of the fees in insolvency proceedings, so the price is not a consideration at all for debtors who fit this track," explains Adv. Alkobi. He illustrates how preferable the new procedure is for the client: "Although only recently the law was approved regularly, only in our firm there are hundreds of clients who are already satisfied with the procedure."

Is the procedure suitable for any situation of debt?

"Not everyone fits. For example, there may be someone whose debts do not allow him to repay the payments, and even if they are retired for seven years, he will not be able to meet the repayment. In such a case, we turn to an insolvency and economic rehabilitation process that allows anyone with a debt over NIS 50,000 to end the debts once and for all."

In order to go to the process of insolvency and economic recovery, do I need to have files in the Execution Office?

"That's it, no! Even if there are no open files at the Execution Office you can request to enter the procedure. For example, when a person who owes NIS 140,000 to a bank, credit company, nonbank loan wave, etc., turns to each of these collectors and asks them to repay the loans in a more convenient retirement, he will be forced to pay higher interest rates that may reach tens or even hundreds of thousands of shekels. On the other hand, if he turns to insolvency and economic recovery, his repayment ability will be examined so that each month he will repay according to his true ability without the debt principal accumulating interest."

Can the procedure be done alone?

"The procedure is highly recommended to be accompanied by an experienced lawyer, because as in any field, a question, clarification, malfunction, information or missing document always arises, and all of these can be dealt with immediately by a lawyer. Of course, there are documents that require signature, affidavit and legal writing that require the intervention of a lawyer, especially since a lawyer will know how to submit the application in a way that will apply to each and every case and even make sure that the delay of proceedings or the cancellation of restrictions will apply to all cases. Moreover, even if during the process another case is opened, or another issue arises, the lawyer can request to attach the new file as well and quickly resolve the problem."

Alkobi further concludes: "For the same reason that you don't tie the tooth to the door but go to the dentist to remove the tooth, these are not things you should do alone, and as with any procedure, it is always recommended to be accompanied by an experienced professional. Anyone who cares about preventing foreclosures, reducing interest rates and retiring the debt correctly that will also affect the future should turn to an experienced law firm that has already managed to provide excellent results in hundreds of such proceedings."

Adv. Amiram Elkobi specializes in advising debtors in execution, foreclosures and restrictions, bankruptcy proceedings and insolvency proceedings. To contact us and for more information, contactus here orby phone: 0776-707389

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 to take proceedings or refrain from proceedings. Anyone who relies on the information appearing in the article does so at his own risk