Israeli Court Approves Rare Debt Rehabilitation Plan for Man Owing 6 Million Shekels

The Magistrate's Court in Rishon Lezion approved an unusual economic rehabilitation plan for a man who accumulated debts totaling approximately 6 million shekels, allowing him to repay less than 47,000 shekels. The insolvency process began about three years ago, initially involving a debt of 9 million shekels, a third of which was repaid through the sale of the debtor's real estate asset. The parties initially agreed on a repayment of 46,800 shekels over three years.

Due to delays in the process, partly caused by the sale of the debtor's apartment, the debtor's attorney, Yosef Ozana, requested shortening the repayment period from the statutory three years to two years. The trustee, represented by attorney Lital Tain, agreed to recognize up to three monthly payments already made, while the insolvency commissioner, represented by attorney Ze'ev Berkovitz, was involved in the proceedings. After negotiations, the parties agreed to a shortened rehabilitation period of 24 months with slightly increased monthly payments, from 1,300 to about 1,700 shekels.

The court, presided over by Judge Dar Lahav, ratified the agreement, giving it the force of a court ruling. Starting July 15, the debtor will make monthly payments of no less than 1,700 shekels for two years, with previous payments from March credited toward the plan. Successful completion of the program will discharge the debtor from remaining unpaid debts not covered by the insolvency estate. The case highlights a rare instance of a court-sanctioned debt reduction and accelerated repayment schedule in Israel's insolvency system.