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Representing Creditors in enforcement and insolvency proceedings
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Legal advice for collection procedures
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Mor & Co. law firm
Indeed, some of the debtors are truly insolvent and the legal proceedings against them are ineffective. However, most debtors own valuable assets, some debtors transfer assets to relatives and act in bad faith, as well as commit the offense of favoring creditors. Some debtors smuggle assets and money to places where they could be located and put towards the creditors’ fund.
The debtor is a resident of Israel or the Palestinian Authority
Is the debtor outside or in enforcement proceedings?
Is the debtor in bankruptcy proceedings?
Are you having trouble getting your money back?
The enactment of the Insolvency and Economic Rehabilitation Law in 2018, implemented a change, which mainly seeks to streamline the procedures against debtors and reduce unnecessary and expensive procedures. However, the law seeks to direct the economic rehabilitation of the debtor by, among other things, giving the debtor a real chance to return his debts to the creditor. The newly established procedures are efficient and fast, and at the very least will provide answers relatively quickly as to the chances of success, This will significantly reduce the many costs imposed on the creditor, including legal fees and tax for attorneys and trustees.
We offer businesses and individuals full legal support in collection procedures.
Quick and precise actions are required in order to thwart the smuggling of assets and preference of creditors by the debtor.
Quick and precise actions are required in order to thwart the smuggling of assets, as well as creditor preference by the debtor.
What is Asset Smuggling? How can the assets be returned to the creditors' fund?
The most common case among debtors who estimate that in the near or distant future they may become insolvent, is to commit acts of asset smuggling. The classic case is the transfer of a residential apartment, the redemption of trusts/compensations (and even funds from the bank account for that matter), and the transfer of the assets to a relative, usually a spouse or an offspring. In such cases, the law automatically states that any act of transferring assets while the debtor knows or should have known that his financial situation is close to or may reach a state of insolvency is an act of bad faith.
If you thought that that was the extent of the requirement to act in good faith, then you are wrong!
In the situation described above, if the debtor’s lack of good faith in the transfer of assets is proven to a high degree of probability, whether through the trustee in an insolvency situation or as part of collection procedures, the assets will be taken from the hands of the next of kin and will enter the creditors’ fund in any asset collection procedure.
How far does the umbrella of creditor preference stretch as part of the duty to act in good faith?
We will describe a situation where the debtor owes 100,000 NIS to 10 people, owing each one of the 10 people 10,000 NIS. If the debtor was in a state of insolvency and at the same time paid his debt of 10,000 NIS to one creditor and was unable to pay the others, he is committing is creditor preference. All this despite the good faith of the creditor. It must be understood that, at the point in time when the insolvent knew about his situation, the money transferred to the creditor did not belong to the creditor, but to the creditors’ fund. In other words, he had to divide the money he received among all ten creditors. That is,1,000 NIS each.
How can you tell if the debtor has other/additional assets for realization?
It is important to contact receivership or other various authorities to find out more details as quickly as possible.
Have you encountered a problem with receiving money that is owed to you?
