Israeli Debtor Jailed for Third Time Over $2.2 Million Debt

The Israeli Supreme Court has upheld a two-week jail sentence for bankrupt debtor Rafael Rubinshtein, who will be imprisoned for failing to meet his financial obligations. This marks at least the third time Rubinshtein, 70, has been jailed over the past 11 years due to his debts, which now total 2.2 million shekels.

Rubinshtein, an Israeli-American citizen, previously served ten months in a U.S. federal prison for offenses related to his real estate marketing business there. He also lost a villa in Savyon, a wealthy Tel Aviv suburb, where he lived with his family, due to enforcement proceedings. The family was evicted and moved in with his wife's parents.

Court documents reveal a history of non-compliance. In 2018, a judge ordered his arrest for failing to provide truthful reports and accumulating a 34,000 shekel debt, stating there was no other way to compel his compliance. He was subsequently jailed for ten days. Further jail orders were issued in March 2022 and September 2023, with the latter being canceled after a payment was made. However, Rubinshtein again defaulted on a 2,500 shekel monthly payment agreed upon in November 2024, with arrears reaching 35,000 shekels by May 2025.

In his August ruling, Judge Gilead Lubinsky-Ziv criticized Rubinshtein's conduct, stating that bankruptcy proceedings are not a matter of personal preference and that the debtor cannot dictate terms to creditors. Supreme Court Justice Ruth Ronen dismissed Rubinshtein's appeal, agreeing that imprisonment was the only remaining option to ensure he fulfills his obligations, especially since he linked compliance to the approval of a debt settlement he proposed, which was not accepted by creditors. Ronen also rejected his claim of inability to pay, noting he provided no evidence of changed circumstances since agreeing to the increased payments.