Police Officer Who Fought on Oct. 7 Denied Debt Arrangement by Court

A police officer who fought during the October 7th events and has since been recognized by the Ministry of Defense with a 50% disability due to post-traumatic stress disorder, requested a debt arrangement from the Beersheba Magistrate's Court. He proposed to pay NIS 5,000 monthly for five years, totaling NIS 300,000. However, his creditors objected, and Judge Yaron Golan rejected the request, closing the case. The debtor, born in 1985, divorced with two children, stated his financial difficulties began with his divorce. After the war started, he explained, he "stopped working for a salary and his income significantly decreased," leading to accumulating debts. He declared debts exceeding NIS 2.76 million, of which approximately NIS 1.8 million were mortgage loans from his ex-wife, for which he was listed as the borrower. He proposed to include only about NIS 784,000 in the arrangement. He reported a monthly income of NIS 23,846 and expenses of NIS 18,064, offering to pay 30% of his debt. The supervisor of insolvency proceedings noted discrepancies, as the divorce agreement estimated the remaining mortgage balance at only NIS 650,000. Although half the rights to a property in Beersheba are still registered in his name, he claimed to have transferred them to his ex-wife in exchange for her commitment to pay the mortgage. The supervisor viewed this as a potential asset stripping from creditors and also pointed to three properties in his name, one in Bat Hefer. According to the supervisor's criteria, in a regular insolvency proceeding, he could have been ordered to pay at least NIS 5,600 monthly. Twelve creditors filed claims totaling approximately NIS 1.47 million, later joined by a finance company with a claim of about NIS 425,000. Three creditors opposed the initial proposal, and three opposed the improved offer, with only one creditor supporting it. The primary objection came from a private lender with an NIS 858,439 claim. The debtor argued he signed the loan only as a guarantor and received NIS 338,700, urging the lender to pursue the primary borrower, who owns a property valued at NIS 4.3 million. The lender countered that they were jointly and severally liable, and three mortgages preceded their claim on the property. The judge sided with the lender, ruling the debtor "presented no guarantee agreement or document indicating his liability was secondary." The judge's decision was largely influenced by the debtor's payment arrears. During the proceedings, he was required to pay NIS 4,500 monthly to the fund but accumulated a NIS 42,000 debt, described as "astronomical" by the arrangement manager. The proceedings were once canceled and reinstated only at his lawyer's request. The judge stated this conduct "raises serious doubt regarding his ability and willingness to meet future monthly payment obligations over many months," noting the case had been open for over a year with numerous exceptional extensions granted. The debtor's claim that his pensioner father would take a loan to cover the arrears was deemed unsubstantiated. The court, while able to impose an arrangement against creditors' majority wishes if deemed fair, was not convinced in this case. The judge found the latest offer not a significant improvement and that a 60-month payout "contradicts the purpose of an arrangement process," which aims for quicker repayment and certainty for creditors. He added that a standard insolvency proceeding, examining asset transfers and other financial instruments, "could yield a significantly higher dividend for creditors than the proposed arrangement."