[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN ISRAEL] 39
After checking the correctness of the application at the secretariat, the application will be forwarded for a Registrar's decision. The Registrar will examine the suitability of the application for the procedure. If the Registrar finds that the conditions for opening insolvency proceedings are met, he orders the summoning of a payment settlement meeting between the debtor and the creditors. The payment settlement meeting will be conducted by the Registrar's representative. The purpose of the meeting is to reach an agreed payment arrangement between the debtor and the creditors already at this point, in order to finish the procedure quickly and efficiently. If an agreed payment arrangement is not drawn up at the settlement meeting the Registrar will issue an order opening proceedings. With the issuance of the order to open proceedings, all of the debtor's assets and liabilities will be managed in a joint framework of the procedure for the purpose of distributing them to creditors according to law. Accordingly, creditors will not be able to act against the debtor. The order opening proceedings will include all or part of the following instructions at the Registrar's discretion: cancellation of proceedings and foreclosures, restriction on the use of a debit card, restriction on receiving or holding a passport and the extension of its validity, restriction on the establishment or participation in the introduction of a new corporation, and more. The interim period will begin from the date of issuance of the order opening proceedings and will continue until issuance Economic Rehabilitation order by the Registrar. During the interim period, the trustee appointed by the Registrar will carry out a comprehensive examination of the debtor's finances and the circumstances that led him to his situation. The debtor must cooperate with the trustee, submit income reports to the trustee and expenses as
required and reach him for clarification if invited. The trustee will work to collect the debtor's assets and distribute them among the creditors after deciding in the debt claims they filed. Submission of debt claims by creditors is from the day the order opening proceedings was published and within 6 months. An economic rehabilitation order will include all or part of the following instructions: payment obligation to be imposed on the debtor, the amount of payments and the period of payments, the assets that will be included in the fund, the manner of realization of the assets, restrictions that will apply to the debtor during the payment period, training for proper financial management, debts for which discharge will not be granted etc. At the end of the payment period set for the debtor in the economic rehabilitation order, the Registrar will examine dismissing the debtor from his obligations. The discharge will be granted if the debtor has met all the conditions of the economic rehabilitation order given to him. The discharge will exempt the debtor from the balance of debts that cannot be paid from his assets. It is possible to determine in an economic rehabilitation order conditions intended for a later period granting the dismissal. As a general rule, the discharge will apply to the remaining debts of the debtor that were created before the issuance of a decree initiation of procedures with the exception of exceptions provided by law. Obligations to which the dismissal will not apply punitive payments, such as fines debt created fraudulently or resulting from theft, sexual offense or serious violence, child support debt etc. 5. Uniformity in the opening of proceedings The Law establishes a uniform and orderly procedure for opening proceedings against a
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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