People who find themselves dealing with different cases of execution , will very well tell you that it is not an enjoyable exercise, and nobody wants to find themselves in this situation. However, this is a part of the lives of most of us and the problem starts with the fact that without absolution or debt erasure, the individual can find himself continuously paying execution interest fees without having an actual opportunity to erase the debt and start anew. It is easy to see that there have been many discussions on the matter and on the 6th September 2015, a new directive, which allows those with built up debt to act towards absolution; debt erasure that is, went into effect.
Adv. Daniel Yanovsky
Before deciding to erase the debt in the execution office files
Just before you run all excited and you are sure your new life is about to begin, it’s best to know that there are very specific criteria about submitting the application and receiving absolution. First of all, you must fill in an application to the head of the execution office, along with a progression of debts. In addition, a list of the creditors, a detailed list of the assets and a signed confidentiality disclaimer must also be sent to them (It is recommended to consult an execution lawyer that specializes in debt erasure about editing the application in a way that makes it acceptable). The criteria for submitting an application for absolution at the execution office are:
- The debtor is means limited over 4 consecutive years: The debtor, requesting absolution, was declared “Means Limited Debtor” and has been means limited for at least 4 years prior to the submission of the application.
- The sum of the debts submitted to the execution office is at the most 800,000 ILS: At the moment of the application submission, the sum of the debtor’s debt cannot exceed 800,000 ILS (Including debts that cannot be absolved – mortgage, alimony, administrative or criminal fines). Let us note that during the examination of the application, the execution registrar will examine the extent of the debts in the execution office and the debts which are not in the execution office. If the total sum of the debt exceeds 800,000 ILS, no absolution can be received.
- Regular payment of the debit order has been paid in installments for the past 3 years : The debtor has paid each installment promptly, given to him by the execution registrar, for the past 3 years prior to the submission of the absolution application.
- No bankruptcy process is present: There is no ongoing process of bankruptcy regarding the debtor at the district court and no such application, that is pending, was submitted, and no process, concluded during the past 5 years is present.
- The debtor has no valuable assets which can be foreclosed, sold or redeemed.
Continuing the debt erasure process
When considering debt erasure in the execution office, it is important to understand that it is a whole process and not just a small inquiry. Therefore, after submitting the application, the execution office registrar will check all the details and if they decide that the debtor did not meet the requirements then they will reject the application. However, if the registrar has reached the conclusion that the debtor has met all the requirements, he will declare that the debtor may continue on with the process . Within 30 days, a message, regarding the opening of the file, during the absolution of the file, will be published and the execution office will send a message regarding the matter to the creditors.
The importance of choosing a professional lawyer for debt erasure
It doesn’t matter how much you owe, at what point in time you deal with this situation or how you got into this position. What is certain is if you are thinking about starting a debt erasure application in the execution office, you will need a professional lawyer that can help you. The new regulations require proficiency, knowledge and deep familiarity with the system itself. Therefore, instead of trying to do it yourself and instead of having your application rejected, it will be best to turn to a professional debt erasure lawyer. Such a professional will be able to help you, hear you out and guide you to the right course of action. Therefore, it is worth researching who you are turning to and in due course you will be able to start the process of erasing your debts (The experience of a lawyer that deals with bankruptcy and execution is a very important asset to have at your disposal!).
Debt erasure – A popular linguistic mistake
In the last year, many customers, interested in debt erasure, have turned to us; however, they are not willing to hear the term “bankruptcy“. It is important to clarify: There is no such juridical term as “debt erasure” – it is the popular name for bankruptcy, and in the end of the process, the debt is erased and the person can move on to a new economic future.
Why should you erase debts?
The whole system of execution was created to help the creditor (someone that is owed money) collect the debt to which he is entitled to by law. For this, there are “legal tools” to pressure the debtors. For example: Seizure of the debtor’s salary or bank account foreclosure, in most cases, an order of prohibition from leaving the country is issued against the debtor and sometimes even a driver’s license limitation.
It is important to know that with the beginning of the debt erasure process = bankruptcy, all foreclosures and limitations are cancelled! Except for the order of prohibition from leaving the country, however, one can submit an application and get a confirmation to leave the country for a limited time. That means that when your bankruptcy application gets accepted, you will be able to get your monthly salary again (not the tax evasive one) to your bank account (the non-foreclosed one). You will be able to renew your driver’s license and even go abroad!
We shall emphasize again, that it is very important to consult a professional lawyer who deals with debt erasure and bankruptcy. We say this not because this is our way of making a living and this is what we do in our office every day. We say this because we have many clients who started the bankruptcy process by themselves or after a mere consultation tried to complete the process independently or they received help from a lawyer who does not specialize in this area. Some lawyers merely studied this field and try to erase their debts without explaining the importance of all the essential details, and most importantly – without making sure that the person is indeed doing what they are required to do during the process. Usually, these cases end up with the process stopping abruptly, and only then the person starts looking for someone who can really help. At this point it is either impossible or it is very difficult to do so. So, just as you would not set up a contract of purchasing or selling your apartment by yourself, you do not just erase your debts by yourself. Spend some time, talk, or better yet meet some execution and bankruptcy lawyers, get to know them, ask questions and only then make advances. The process will take a year and a half and it is a lot more pleasant and a lot safer to work with experienced professionals in the debt erasure field.
We invite you to read other articles on our website and get the information that can help you get through a difficult and unpleasant period with minimal damage and in a much shorter timeframe. If you have any questions, please write to us via our website or call us, and we will be happy to help you.
*The above article is by no means a legal advice; any use of this information is solely under the reader’s responsibility.