Jerusalem Court Issues Open-Ended Debt Repayment Order for 27-Year-Old
A Jerusalem Magistrate's Court issued an open-ended economic rehabilitation order requiring a 27-year-old debtor to pay 2,000 NIS monthly. The judge cited lack of good faith and unfulfilled earning potential regarding 567,000 NIS in total debts.
A Magistrate's Court in Jerusalem has issued an unusual economic rehabilitation order requiring a 27-year-old debtor to repay his liabilities through monthly installments of 2,000 NIS for an indefinite period. Judge Ofer Yuval expressed skepticism regarding the debtor's reported income, ruling that his conduct must be monitored over an extended timeframe before finalizing a definitive repayment schedule.
The case involves a separated father of a young child who faces ten debt claims totaling approximately 567,000 NIS. Of this sum, around 113,000 NIS were classified as non-dischargeable debts owed to the Income Tax Authority and the Interoperable Collection Center for Fines. Prior to the Iron Swords war, the debtor served as the owner of a construction contracting company that worked for other firms and contractors. In 2022, the company's turnover exceeded 60 million NIS, with pre-tax profits reaching 2.6 million NIS, before plunging to a 10 million NIS loss the following year.
The debtor claimed that during his prosperous years he earned between 12,000 and 15,000 NIS per month, whereas he currently works as a general wage laborer earning only 6,000 NIS. To support his claim, he presented pay slips and bank deposits, adding that he resides rent-free at a friend's apartment and is obligated to pay 1,200 NIS monthly in child support, though he failed to provide a court ruling or proof of actual payments. Another point of contention concerned a vehicle valued at 80,000 NIS acquired through financing; the debtor claimed he sold it for scrap due to engine and transmission failures, but provided no documentation for the sale or the mechanical issues.
The case trustee and the Insolvency Commissioner recommended obligating the young debtor to pay 3,500 NIS per month for five years, based on an earning capacity estimated at 12,000 NIS. However, Judge Yuval opted for a lower monthly payment while leaving its duration open-ended. He noted that the debtor previously managed a multi-million-nis enterprise, negotiated contracts, and employed workers, indicating that he is not currently fulfilling his true earning potential. At the same time, the judge found it difficult to definitively attribute to him twice the income shown on his current pay slips.
"I believe the individual is acting in extreme bad faith throughout the proceedings and is failing to provide the trustee with complete and truthful information," Judge Yuval wrote. Consequently, the court ordered the debtor to pay 2,000 NIS monthly without a time limit at this stage. In one year, the trustee will submit an updated report on the debtor's conduct and findings, after which the repayment duration may be reassessed.
