II · Insolvency
Out of debt.A fresh start.
Insolvency & Financial Rehabilitation
Israel's Insolvency and Financial Rehabilitation Law lets a person with debts they cannot pay bring them into a single proceeding, stop collection against them, and at the end receive a discharge from the remaining debt.
The case runs before the Insolvency Commissioner, a trustee and the court, and requires reports, documents and payments on time. I know the process from every side, what the officials look for, and where cases get stuck.
Chapter I
Who it's for
- 01Anyone with debts to banks, credit companies, authorities or private creditors
- 02Anyone facing collection files, frozen accounts and restrictions
- 03Debtors already in proceedings who need to reduce payments or prevent cancellation
- 04Private creditors who need to file a proof of debt
Chapter II
Scope
- Assessment and opening the case
- Mapping debts and income, choosing the right track, and filing a complete application to open proceedings.
- The interim period
- Reports, periodic statements, documents for the trustee, and support through the investigation.
- Responding to the trustee's report
- A reasoned response to the trustee's findings, so the repayment plan is one you can keep.
- Reducing the monthly payment
- An application to change the payment order after a change in income, health or family.
- Ongoing applications
- Travel abroad, approval of a sale agreement, release of funds, or running a business during the case.
- Preventing cancellation
- Responding to warning letters and applications to cancel, and fixing what was missed.
- Discharge
- Through to the discharge at the end of the plan, and where appropriate an application for early discharge.
- Representing creditors
- Proofs of debt, objections to discharge, and protecting private creditors' rights.
Chapter III
Process
- 01
Mapping
We gather every debt, income and expense, and I check whether the process fits and which track.
- 02
Application
A complete application with every document. Once proceedings open, collection stops.
- 03
Interim period
Monthly payments, reports and the trustee's review. I make sure every document is filed on time.
- 04
Rehabilitation order
The court sets a repayment plan based on the trustee's report. I work to keep it realistic.
- 05
Discharge
At the end of the plan a discharge is granted, and the remaining debts included in the case are cleared.
Chapter IV
Questions
Questions on insolvency
01Is this the same as bankruptcy?
It replaces it. Since 2019 Israel's Insolvency and Financial Rehabilitation Law applies. It centres on financial rehabilitation and a repayment plan that ends in a discharge.
02Will collection against me stop?
Usually, yes. Once an order to open proceedings is issued, collection and enforcement are stayed, and creditors file their claims within the case.
03How long does it take?
An interim period, then a repayment plan. The length depends on the circumstances and on how the case is managed. At our first meeting I will estimate the timeline in your case.
04Are all debts cleared at the end?
Most debts included in the case are cleared by the discharge. The law excludes some, for example child support debts and criminal fines. It is worth checking this in advance.
05Can my monthly payment be reduced?
Yes, when there is a material change: lower income, illness or a change in the family. The application has to be reasoned and supported by documents.
06What if I missed payments or reports?
The trustee or the Commissioner may ask to cancel or extend the case. Act early: fix what was missed and respond in writing.
Chapter V
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