Our firm represents debtors in insolvency proceedings

The representation of debtors takes place throughout the complex insolvency process, from preparing the applications to receiving the discharge. The professional care and personal attention we provide significantly affect the conduct of the process and allow debtors to go through it as smoothly as possible while minimizing damage.

What is insolvency? – Insolvency is a procedure taken by or against a person (as opposed to a corporation) who is unable to pay all of their debts in the foreseeable future. According to the law (Insolvency Ordinance), insolvency proceedings can be initiated both by the creditor – who initiates them in order to create pressure on the debtor to pay a large portion of their debts, and by the debtor themselves – out of their desire to eventually obtain a discharge within the framework of a proposal in which they will pay part of their debts to their creditors and be discharged from the remainder.

There are several limitations and several advantages for a debtor against whom insolvency proceedings are taken, whether at their initiative or at the initiative of a creditor. The greatest advantage is the stay of proceedings. From the moment an order for the administration of assets is issued against a debtor, it is not possible to pursue financial claims against them – neither in the courts nor in the execution offices. This also applies to debt collection proceedings by authorities, which are independent in collection proceedings and are not required to act against a debtor within the framework of the execution offices.
On the other hand, there are several debts that are not frozen as part of insolvency proceedings. The most prominent of these are alimony payments and fines.

Our activity in the field of insolvency

Our practice in the field of insolvency focuses on representing debtors throughout the entire process, which usually lasts for years. The process begins with submitting a request, accompanied by completing a long and detailed questionnaire. The request is submitted to both the Official Receiver (the “OR”) and the District Court in the area of the debtor’s residence or business.

We move with the debtor to the next stage, in which the OR’s investigators focus on investigating their financial ability. We then accompany the debtor to the first hearing scheduled in the District Court, where the court discusses the debtor’s request. After we manage to convince the court of the debtor’s good faith and that there is justification for taking insolvency proceedings – an order for the administration of assets is issued against them and a trustee is appointed for their assets (at the first stage this is usually a representative of the OR). From this stage, insolvency proceedings begin in practice.

We accompany the debtor in creditors’ meetings, which are usually the critical points in insolvency proceedings, since this is where all the debtor’s creditors meet and all the emotions erupt. At this stage, and after calming the waters, a trustee is usually appointed from among the debtor’s creditors or their representatives.
When the conditions are met, which usually occurs after several years, or when the debtor finds financial sources that allow them to pay a reasonable portion of their debts – we jointly prepare with them a proposal for a creditors’ arrangement and/or a request for a discharge.

At the end of the process and after the creditors’ meeting and the court approve the settlement proposal or the discharge request – the debtor is discharged from their debts and can start a new chapter in managing their financial affairs.

For more information on insolvency, you can refer to the articles on the website: