Menu
Menu
A lien is a restriction imposed on property, the purpose of which is to prevent its sale or “smuggling” from creditors.
A lien can be imposed on a physical asset such as a car or apartment, or on financial assets such as a bank account, salary, or pension funds.
In the first stage, the foreclosure is only a “foreclosure by registration,” meaning that the asset cannot be sold or transferred, and if it is a bank account or salary, they cannot be used either, but they are not yet realized (i.e., taken by the creditor).
After a certain period of time, a request will be submitted to enforce the foreclosure, and then the funds or property will also be transferred to execution.
Foreclosures don’t fall on us out of the blue. Usually, long before a foreclosure is imposed, you will receive warning letters from the creditor (the one you owe money to), followed by a “warning” notice about opening a case in the enforcement office, and only after that, if you haven’t taken care of the debt, will the foreclosures be imposed.
Therefore, it is important not to ignore letters and notifications, but to seek professional advice as soon as possible.
A good attorney will handle all the threatening letters for you, recommend a long-term solution, and give you “industrial peace” so you can focus on the things that are truly important to you – home, family, work, etc.
Broadly speaking, there are 3 ways to cancel a foreclosure:
It is important to note that the solution of paying off the debt is only relevant if this is your only debt! If you have additional debts, and you are unable to pay them all Debts, it is worth stopping everything, seeking legal advice, and only after you have formulated a long-term strategy for getting out of debt – decide who to pay and how much. You are definitely not You want to be in a situation where you paid one creditor the debt, canceled the foreclosure, and after a week you have to deal with another foreclosure. If you have concerns that this is the case, it is better to save the money to finance an insolvency proceeding or for the purpose of a comprehensive debt settlement.
Most foreclosures are imposed by execution, but local authorities, tax authorities, and several other institutional entities have the authority to impose foreclosure under the Tax Collection Ordinance.. This is an administrative collection procedure, which was enacted back in the days of the founding of the state, and its purpose was to give state authorities extraordinary (and excessive!) collection powers.
Usually, you are supposed to receive a notice before such a lien is imposed, but many times people only find out about the lien after it has been imposed. What to do? If this is your only debt – contact the creditor and settle the debt.
If there are additional debts, you may need a comprehensive solution such as a debt settlement or insolvency, within the framework of which it will also be possible to remove a lien according to the Tax Collection Ordinance. In any case, it is recommended to contact us and receive advice before acting.
A garnishment of a salary or bank account usually only happens when you ignore the debt and do not respond to warning letters from the enforcement agency. There are several ways to cancel a garnishment of a salary or bank account: One option is to pay the debt and close the debt collection case, a second option is to try to reach a distribution arrangement with the winner (the one who is owed money) or to file a payment order in the debt collection case – in both cases, the garnishments will be removed as long as you meet the monthly payment. A third option, if it is not possible to meet the payment distribution, is to file for insolvency proceedings, in which an order to stay proceedings will be issued and the garnishments will be removed. Either way – if garnishments have already been imposed, this means that there is an attorney on the other side who has started working, and therefore you must also bring a lawyer who specializes in handling debts into the picture, as soon as possible, and obtain legal advice.
A lien on real property (car, apartment) or financial assets (educational funds, provident funds, etc.) are liens that aim to freeze the existing ownership status and prevent the smuggling of assets. Therefore, if liens have been imposed on assets, the only way to cancel them is to pay the debt or reach another arrangement with the winner. It is important to know that insolvency proceedings do not result in the cancellation of a lien on assets, and the liens will remain until the end of the procedure. In any case, if liens have already been imposed, this means that there is an attorney on the other side who has started working, and therefore you must also bring a lawyer who specializes in handling debts into the picture, as soon as possible, and obtain legal advice.
A lien will only be canceled upon the order of the judicial authority that registered the lien. That is, if the lien was imposed as part of a bankruptcy case (which is usually the case), then the cancellation will only be based on a decision by the bankruptcy registrar. If you have completed insolvency proceedings and received a discharge, the liens are expected to be automatically deleted within a few weeks, after the bankruptcy case is closed.
A stay of proceedings cancels some of the seizures, especially those that interfere with daily conduct, namely – a seizure on a bank account or salary. Other seizures, on physical assets (such as an apartment or car) or on financial assets (provident funds, continuing education funds, etc.) are usually not canceled when a stay of proceedings is granted, since the purpose of these seizures is to prevent the smuggling of assets.
A disability pension is a pension that is protected from attachment under the Wage Protection Law (except in the case of alimony debt). However, it is important to know that the protection applies for only 30 days, and if the pension or part of it remains in the bank account for more than 30 days, the attachment on the account will also apply to the pension funds. The same applies to other pensions that are protected from attachment.
A garnishment on a bank account, similar to a garnishment of wages, is a serious sanction that affects a person’s ability to conduct their finances in an orderly manner. A garnishment on a bank account will usually only be imposed if you have not responded in time to a warning sent to you by the enforcement agency. To remove a garnishment on a bank account, you must submit an application for a payment order, or initiate insolvency proceedings, and then the garnishment will be removed. It is also possible that an administrative garnishment was imposed on the account by state authorities (usually the Tax Authority, municipality, or MDA) according to the Tax Collection Ordinance, and not as part of enforcement proceedings, and then the debt must be settled with the body that imposed the garnishment (such as the municipality, for example). However, if you have reached a situation where there is a garnishment on the account, it is very important to obtain legal advice before paying the debt , because in most cases it is better to formulate a comprehensive solution for all debts, rather than “putting out fires.”
A warning is the first document you will receive when an enforcement case is opened against you. The warning form details the procedure that has been opened and the options open to you to deal with the debt, and how much time you have to respond to the warning. If you have received a debt warning form, do not ignore it or delay, but seek legal advice as soon as possible. The time given to you to respond is very short (between 20 and 30 days) and if you do not respond in time, you will be declared a debtor who is evading payment of his debts and serious sanctions will be imposed on you (salary and bank account garnishments, etc.). It is very important not to act before consulting with an attorney specializing in the field, especially if there are additional debts.
If you have received a warning from an enforcement officer, you must act within the time period specified in the warning and deal with the debt. One option for dealing with the debt is to submit a request for a payment order, which means spreading the debt into payments according to your abilities. As part of such a request, you will be required to declare the household’s income and expenses, your rights and obligations, and the enforcement officer will determine the monthly payment you must pay, in accordance with the maximum periods stipulated by law, and as long as you meet the payments, no additional restrictions will be imposed on you. At the same time, it is very important to submit a request for a payment order only after you have received legal advice, especially if there are additional debts, because mistakes – especially at this stage – may be costly.
Insolvency is a (financial) situation in which a person is unable to pay his debts (also previously called “bankruptcy”).
Often the problem arises due to improper financial management, at home or in business, over time, but can also be caused by an unusual event in the family (firing, illness, collapse of a business, etc.).
Not every situation of difficulty in making payments is “insolvency” – but if there is difficulty dealing with debts, it is always recommended to consult a professional who specializes in debt management and financial rehabilitation .
An insolvency proceeding is a legal procedure that aims to allow someone who has fallen into financial collapse, in good faith, and cannot repay their debts – to turn a Fresh start, free of debt.
This is a procedure that officially lasts between one and four years, but in practice can last even longer. At the beginning of the procedure, an order is issued that freezes all collection procedures, and at the end of the procedure, an order is issued that permanently erases all debts.
Anyone participating in an insolvency proceeding is required to report their income and expenses throughout the entire proceeding, as well as pay a fixed monthly payment to the proceeding fund. The proceeding was previously called “bankruptcy” and, starting in 2019, due to a change in the law, the proceeding was called by its new name – insolvency.
First – it is worth consulting with a lawyer, understanding the extent of the household’s debts and income, and together – making a decision.
It is highly advisable not to decide anything on your own – and to go to an experienced professional who has professional knowledge in financial rehabilitation and legal support.
According to the new law, it is possible to realize (that is, sell) a residential apartment as part of an insolvency proceeding.
However, the Ministry of Justice and the courts will generally prefer to avoid this, and give the person in debt the option of redeeming the property, that is, paying a partial value of the rights in the house, thus avoiding the family’s eviction and the sale of the house.
Of course, if you own a home and are considering insolvency, it is imperative to consult with an attorney who specializes in the field and understand the risks. It is important to say that until 2019, the law was different, providing stronger protection for the home.
If you are in bankruptcy proceedings (not insolvency) that opened before 9/2019 – your situation is even better.
In any case, it is recommended to consult a lawyer.
In insolvency proceedings, there is the possibility of realizing vehicles, but this option is usually reserved for cases of luxury vehicles.
So if you have a new Jaguar, you’ll probably have to part with it, but if you drive a 2010 Fiat Punto worth NIS 40,000, probably no one will touch it, with the understanding that anyone who works, raises children, or lives in a place where it’s impossible to get by on just a monthly allowance, for any other reason, needs a car to get around.
This situation may change if there is a lien (mortgage) on the vehicle. When the vehicle is liened, there is a higher chance that the vehicle will be realized (i.e., sold in foreclosure), especially if the loan is not paid regularly.
In this case too, it is recommended to consult with an attorney who specializes in the field before making decisions.
As soon as a person enters insolvency, the bank turns to the guarantors and demands that they pay the debt (that is precisely why they signed the guarantee).
We often encounter people who avoid insolvency proceedings so as not to harm the Arabs, but the sad truth is that the Arabs got into trouble a long time ago, the day they signed the guarantee, and the fact that you postpone the end won’t really solve the problem for anyone.
If insolvency is the right solution for you, it is better to start the process as early as possible, before you take out more loans or get more people involved.
The guarantors will be able to continue paying the loan as scheduled, or reach an agreement with the bank for partial payment of the debt.
If the business is your livelihood, no one has an interest in the business not continuing to operate.
To continue operating the business, you will need to submit an application to the supervisor, and show that the business is profitable and that there is no risk of further financial complications. As long as this is the case, there should be no problem in obtaining approval to operate the business, even in insolvency.
Of course .
A bank account is a basic fundamental right, and according to Directive 422 of the Supervisor of Banks (at the Bank of Israel), every bank in Israel must open an account for anyone who needs and wants it, even if they have debts.
Therefore, even if an execution case or insolvency proceedings are pending against you, you are still entitled to open an account at any bank you wish (not just at the Postal Bank).
This is a balance-only account (meaning – no checks, no credit cards, and no credit limit), but one that will allow you to manage standing orders and a direct debit card and virtually perform any transaction. Yes, even when you are bankrupt.
There are many good solutions, such as debt settlement, negotiations with creditors, and associations that assist with financial support.
The truth is, you’re not supposed to know for yourself what’s right for you. Just as if you have a medical problem, you’re not expected to know whether the solution is surgery or medication (that’s what a doctor is for, right?), so too with debts – you should consult with an attorney who specializes in the field, and together with him make the best decision for you.
Absolutely. Insolvency (=bankruptcy) is usually the last option for us, and if there is a possibility of offering a debt settlement, that is probably better for everyone.
The point is that in order to reach an agreement, it is advisable to offer creditors (those to whom you owe money) immediate payment, even if it is only partial. Most creditors would prefer to receive part of the debt here and now, rather than be dragged behind you for many years in the insolvency process.It is possible to negotiate with each creditor separately, and it is possible to offer a comprehensive debt settlement, under the supervision of the court.
I won’t go into details here, but a good attorney will be able to guide you in choosing the right solution for you, and also negotiate with the creditors. In any case, it is important that the arrangement is one that you are able to meet, and not one that will drag you into additional debt.
It is important to understand how the bank’s collection mechanism works. As long as the debt is at the branch, the branch manager is not authorized to give “discounts” or “haircuts,” even if you pay 98% of the debt.
He can offer you a loan extension or a loan rescheduling (and will usually ask for more guarantors or collateral), but the cancellation of a debt is usually not within his authority. Only once the debt is transferred to legal treatment in the bank’s collection department or with an external attorney can an arrangement be offered, and in most cases the bank will be happy to give you a “haircut” and receive part of the debt here and now.
How much is a haircut? It varies from case to case, but usually the numbers range from 30%-70% of the debt.
As mentioned, only when the debt is transferred to legal treatment can real negotiations with the bank begin, and even then – it will take at least another two to three months until a bankruptcy case is opened against you and the foreclosures begin.
It is very important to keep your cool during this period, not to make rash decisions, and certainly not to rush to pay off the debt if you are not truly able to financially afford it. Stop everything, take a deep breath, get professional advice, and use this time to formulate a comprehensive debt settlement or, alternatively, make a decision on insolvency proceedings.
The first step is to choose an attorney you trust, who will be able to accompany and guide you, give you peace of mind and security, and negotiate with the creditors.
If you are not sure that you can meet your existing debts, it is very important to stop everything and be careful of mistakes that will be very difficult to correct later.
Contact us and schedule a consultation with a lawyer who has already assisted dozens of families in your situations. Until then, it is simply advisable to wait and not take any significant action.
Remember – in any case, do not take out additional loans, do not sign anyone as a guarantor, do not mortgage the house, and do not withdraw the pension, but only as part of a comprehensive arrangement.
If the bank refuses to open an account for you, for any reason, it must give you a written reason for the refusal.
Didn’t you receive it? Present it to the bank. Procedure 422 of the Supervisor of Banks, turn on a video camera, and ask the bank teller to explain to the camera why he is acting in violation of the procedure.
Most likely, he will go to consult with the branch manager and get back to you with a positive answer.
If we get into debt – the first thought is that we have to pay them off, right?
But what happens if it is not possible to pay all the debts? If the debts are simply “too big for you” or have already been taken to court?
First of all – stop. This is the most critical time.
We need to sit down and make a neat list of all the “open” debts we have – everything including everything: loans, bank balance (minus), credit cards, outstanding checks, debts to family and friends, etc. Understand the full picture. If the amount is one that you can afford – then it is worth raising the money and paying, or reaching a (realistic!) installment arrangement with the bank. But if you see that the debts are already starting to become “big” for you, then it is sometimes better to stop everything, take a deep breath, and not make rash decisions, but to get professional advice and formulate an outline for a comprehensive debt arrangement, or consider insolvency proceedings. Either way, it is worth consulting with us before making any decisions.
Excellent question. In principle, a person must only repay his own debts. Not my spouse’s (nor his/her children or parents, for that matter), and therefore, if I have a debt to the bank, the bank can only seize my salary or my bank account, not anyone else’s.
On the other hand, once a couple has a joint account, both are jointly and severally liable for any loan or debit in the account, even if the money was actually used by only one of them. Even if they later decide to divorce or separate property, it doesn’t matter from the bank’s perspective – it will try to collect from each of them separately, and any amount that one of the spouses paid will be deducted from the joint debt.
Of course, afterwards, the couple can sue each other, but that is already related to family law, and the bank is not interested.
Therefore, if you see that you are on the verge of financial trouble, it is very important not to involve additional family members – not to add partners to the account or to sign guarantors, so as not to entangle them in the existing debt as well.
Do not sign. Unequivocally.
The vast majority of loans today are given without guarantors, and if the bank asks for guarantors, it is probably because it understands that this is a high-risk loan. If this is the case, another loan will not help.
Want to help a friend? Recommend that he seek legal advice, even come to a meeting with him. If you also want to help him financially – go ahead, but do so responsibly, as part of a comprehensive settlement.
Signing a guarantee could lead to you also being dragged into debt with him, without actually solving the problem.
Debts are a legal problem, and to get out of them you need legal advice.
(Just like when you go to a doctor with a medical problem, you don’t try to solve it yourself at home).
People who try to solve the problem on their own usually make mistakes that are very difficult to correct later.
If you are having difficulty affording a lawyer, check your eligibility for legal aid or the Bar Association’s Mitzvah Program, and if not, then it is worth contacting one of the lawyers at Fresh Start. A consultation with a private attorney usually costs a few hundred shekels, and full legal representation in the process can reach tens of thousands of shekels.
On the other hand, a good lawyer will save you much more than it costs, and most importantly, will give you security and peace of mind. Remember that this is a process that can last several years, so it is important to choose a lawyer that you trust and that you have good chemistry with.
If there is a cash flow problem, it is worth asking to spread the fees into payments.
Debts must be paid, but if you are unable to repay the debts, then the state – or anyone else – has no interest in leaving you in this situation for the rest of your life.
The state knows that living in debt harms your health, your relationship, and your ability to advance at work and raise children in peace, so the sooner you get out of debt, the better for everyone.
A decrease in household debt means more employment and consumption, and less health and welfare spending, which is good for the economy and society as a whole.
And to you too, of course.
The main questions to check are:
With the calculator on a Fresh start – you can find out which solution suits you best and what you should do.
Therefore, it is recommended to contact a professional lawyer. If you still want to understand the concepts more – in the link you can find the complete glossary of terms for people in debt.
If you feel like your debts are starting to close in on you, here are four ironclad rules that you should definitely avoid:
We recommend contacting organizations that deal with financial management and family support.
Example entities:
The information on the “New Page” website is general and non-binding, and is not necessarily the most up-to-date information. The information is not intended to replace legal, financial or other advice, and in any case – it is advisable to consult a lawyer before making decisions regarding debt matters!
New Page is not responsible for the service provided by the lawyers rated on the site. Use of the site is the sole responsibility of the user, and in accordance with the Terms of Use | Accessibility Statement
