Accumulated a debt of 6 million shekels, and will repay only 47 thousand shekels
A rare rehabilitation plan has been approved for a person who accumulated a massive debt and entered insolvency proceedings. The court in Rishon LeZion accepted the agreement of the parties, and the debt will be closed within two years.
The Magistrate's Court in Rishon LeZion approved a rare economic rehabilitation plan under which a man who accumulated debts of about 6 million shekels will repay less than 47 thousand shekels. With the consent of the parties, Judge Dar Lahav ruled that the repayment period would be shortened to two years instead of three, as required by law.
The insolvency proceedings began about three years ago. The original debt stood at 9 million shekels, and a third of it was repaid as part of the realization of a real estate asset owned by the debtor. At a certain stage, the parties reached an agreement that the debts would be closed with a payment of 46,800 shekels spread over three years. However, against the backdrop of the proceedings taking longer than expected, the debtor's attorney, Adv. Yosef Ozana, argued that this did not happen due to his fault, citing the realization of his apartment, and raised the question of whether it was justified to shorten the rehabilitation period.
While the trustee, represented by Adv. Lital Tain, expressed consent to recognize retroactively a maximum of three monthly payments, the debtor insisted on applying the plan to an earlier retroactive date (the Commissioner for Insolvency was represented by Adv. Zeev Berkovich). The parties conducted a dialogue off the record to reach an agreement, understanding that as long as the repayment plan is not finalized, the debtor remains exposed to the risk of including new assets into the debt collection fund.
At the end of the hearing, the parties informed the court that they had reached an agreement in principle: instead of the default period, a shortened rehabilitation plan was set for 24 months with a minimal increase in the monthly payment. Instead of paying 1,300 shekels a month for three years, about 1,700 shekels a month will be collected for two years, with recognition of four payments already made.
"With the consent of the Commissioner, the trustee and the individual, and in the absence of objection from any of the creditors - a decree for economic rehabilitation is hereby issued in accordance with Section 161 of the Insolvency and Economic Rehabilitation Law," Judge Lahav wrote.
Starting from July 15, the debtor will transfer to the debt collection fund a monthly payment of not less than 1,700 shekels for 24 months. Successful compliance with the plan will exempt him from past debts.
