Insolvency and Economic Rehabilitation Law, 5778-2018
חוק חדלות פירעון ושיקום כלכלי, תשע"ח-2018
Published: 2018-03-15Consolidated Hebrew text as of 2026-08-02 · Last amended 2026-07-28✓ Amendment status checked against the Knesset legislation record on 2026-09-17
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Unofficial English translation — for reference only. It may contain errors or omissions and cannot be relied on as a legal text. Only the Hebrew text published in Reshumot is legally binding.More
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Chapter IX: Discharge
Discharge§
174.
(a)At the end of the payment period, and if an immediate discharge has been granted to the individual under section 167 – upon the grant of the economic rehabilitation Order, the individual, and he alone, shall be discharged from his past debts that cannot be repaid from the assets of the creditors' fund.
(b)The discharge shall not –
(1)derogate from the trustee's powers in respect of the assets of the creditors' fund as vested in him under section 131;
(2)derogate from the individual's duty to assist the trustee and cooperate with him as referred to in section 138, and to comply with the conditions of the economic rehabilitation Order that apply even after the discharge.
(c)The Official Receiver shall give the individual a certificate of the grant of a discharge as aforesaid.
Debts Not Subject to Discharge§
175.
(a)The discharge shall not apply to the following past debts:
(1)a punitive payment;
(2)a debt created by way of fraud or arising from a theft offence or a sexual offence or serious violence offence as defined in the Victim Rights Law, 5761-2001;
(3)a maintenance debt for which the liability is under a judgment.
(b)Notwithstanding the provisions of subsection (a), the court may, in exceptional circumstances justifying this, order that the discharge shall apply to the following past debts, all or part of them, and it may make the application of such discharge conditional on conditions:
(1)interest, a fine or another payment in respect of non-payment by the due date of a punitive payment that was added or imposed during the period preceding the date of the grant of the Order for the opening of proceedings;
(2)a maintenance debt for which the liability is under a judgment.
(c)In addition to the provisions of subsection (a)(2), the court may order that the discharge shall not apply to a past debt originating in an obligation to pay compensation under section 77 of the Penal Law, 5737-1977, if it has found that this is justified in light of the nature of the offence for which the compensation was imposed, its gravity or its circumstances.
Revocation of the Discharge§
176.
(a)The court may, at any time, order that the discharge is void ab initio and order an amendment of the economic rehabilitation Order, including an extension of the payment period, if one of the following applies:
(1)new facts have come to light that, had they been known to the court before the date of the discharge, would have justified extending the payment period under the provisions of section 163(c) to (e);
(2)the individual did not assist the trustee or did not cooperate with him as referred to in section 174(b)(2), or has violated, after the date of the discharge, a material condition of the conditions of the economic rehabilitation Order as referred to in that section.
(b)Revocation of the discharge does not affect the validity of a sale, transfer, payment or other legal act carried out lawfully after the date of the discharge and before its revocation.
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Contact Us →Chapter X: Provisions regarding a Deceased Individual
An Individual Who Has Died while Insolvent§
177.
(a)If an individual has died while insolvent and no Order for the opening of proceedings has been granted in respect of him, the provisions of this section shall apply in respect of the estate.
(b)The estate administrator may submit to the Official Receiver an application for the estate to be administered in accordance with the provisions of this section (in this section – an application for administration of the estate in insolvency proceedings), if the conditions for the submission of an individual's application under section 104(a) or 186 have been met.
(c)A creditor of a deceased individual may submit to the court an application for administration of the estate in insolvency proceedings – if the conditions for the submission of a creditor's application under section 109 have been met.
(d)The provisions of Chapter II: Order for the Opening of Proceedings on Application by an Individual Whose Total Debts Exceed NIS 176,923.12, and Chapter III: Order for the Opening of Proceedings on Application by a Creditor or the Attorney General, shall apply to the application for administration of the estate in insolvency proceedings and its hearing, with the necessary modifications.
(e)If the Official Receiver or the court, as the case may be, has approved the administration of the estate in insolvency proceedings, pursuant to an application as referred to in subsections (b) or (c), the provisions under this Law that apply to an Order for the opening of proceedings granted in respect of a corporation ordered to be wound up by the court shall apply, with the necessary modifications and subject to the following provisions:
(1)the Official Receiver shall be responsible for the administration of the proceedings as if an Order for the opening of proceedings had been granted in respect of an individual;
(2)the Official Receiver may appoint the estate administrator as trustee;
(3)a pending proceeding in a court or a religious tribunal regarding the administration of the estate shall be transferred to be conducted within the framework of the insolvency proceedings.
An Individual Who Has Died after the Grant of an Order for the Opening of Proceedings§
178.
If an individual has died after an Order for the opening of proceedings has been granted in respect of him, the insolvency proceedings shall continue in accordance with the provisions of section 177(e).
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Contact Us →Chapter XI: Miscellaneous
Allocation to a Person Entitled to Maintenance§
179.
(a)If an individual has a maintenance debt that he is liable for under a judgment and whose repayment date falls after the grant of an Order for the opening of proceedings, the following provisions shall apply:
(1)upon the grant of the Order for the opening of proceedings, the Official Receiver shall direct that a sum be allocated to the person entitled to maintenance to be paid to him from time to time from the individual's income from work or from any other source or from the assets of the creditors' fund, until the court's determination of the matter; the allocated sum shall be in the amount of the sum paid to the person entitled to maintenance before the grant of the Order for the opening of proceedings, unless the Official Receiver has found that there is justification for reducing it;
(2)upon his appointment, the trustee shall apply to the court for an order that a sum be allocated to the person entitled to maintenance to be paid to him from time to time from the individual's income from work or from any other source or from the assets of the creditors' fund, until the end of the payment period, and if an immediate discharge has been granted to him – until the date of the grant of the discharge in the economic rehabilitation Order.
(b)The Official Receiver or the court, as the case may be, may allocate a sum as referred to in subsection (a)(1) or (2) even if after the allocation the subsistence allowance that remains in the individual's hands under section 156 or section 162(a)(1) will be less than the sum exempt from attachment under the Wage Protection Law, 5718-1958.
(c)An allocation under subsection (a) shall have the same effect as a payment under a judgment.
Powers to Demand Information and Inquiry and Power to Cancel an Existing Contract, after the Interim Period§
180.
The powers of the Commissioner and the trustee under Section B: Examination of the Financial Position of the Individual, of Chapter VII and under section 158 shall be vested in them also after the interim period, to the extent required for the purpose of continuing the insolvency proceedings.
Transfer of Management of Proceedings from the Commissioner to the Court§
181.
(a)Notwithstanding the provisions of section 122, the Commissioner, on his own initiative or at the request of the individual, a creditor or the trustee, may at any time apply to the President of the Magistrate's Court in the district in which the insolvency proceedings are being conducted, with a request that the management of the proceedings be transferred to the court.
(b)The President of the Magistrate's Court to whom a request has been submitted under subsection (a), or another judge of the Magistrate's Court whom the President has authorised for that purpose, may transfer the management of the insolvency proceedings to the court, if he found that due to the complexity of the proceedings or for the benefit of their efficient management it is appropriate that they be conducted before the court.
(c)Where the management of the insolvency proceedings has been transferred to the court under this section –
(1)all the management powers in respect of the insolvency proceedings under this Part shall be vested in the court;
(2)the trustee shall act on behalf of the court and shall be subject to its directions and guidelines, and may apply to the court with a request for directions as referred to in section 129, including on the matters listed in the opening passage of section 129(b).
Retention of Power by the Commissioner to Manage Insolvency Proceedings in respect of Low-Amount Debts§
182.
Where the Commissioner has issued an Order opening proceedings in respect of an individual and it becomes apparent in the course of the insolvency proceedings that the total of the individual's debts is less than NIS 176,923.12, the Commissioner shall continue to manage the insolvency proceedings in respect of that individual.
Cancellation of an Order Opening Proceedings due to the Conduct of the Individual§
183.
(a)Where the court has found, in insolvency proceedings opened at the request of an individual, that a condition under section 163(c)(1) is fulfilled or that the individual has breached a condition of the Order for economic rehabilitation and that as a result the proper management of the insolvency proceedings has been materially prejudiced, it may, after affording the individual and the creditors an opportunity to state their positions, cancel the Order opening proceedings; where the court has ordered the cancellation of the Order, it shall direct how the assets of the creditors' pool are to be dealt with.
(b)The court may defer the cancellation of the Order opening proceedings in order to allow the re-imposition of restrictions or attachments that were cancelled upon the issuance of the Order under section 121.
(c)The cancellation of an Order opening proceedings does not affect the validity of any sale, transfer, payment or other legal act performed lawfully before the cancellation.
(d)Nothing in the provisions of this section shall derogate from the power of the court to cancel an Order opening proceedings under section 286.
Additional Insolvency Proceeding§
184.
(a)The issuance of an Order opening proceedings in respect of an individual shall not prevent the issuance of an additional Order opening proceedings in respect of him (in this section – the additional Order) in respect of debts that are not past debts in the first insolvency proceeding.
(b)Where a request for the issuance of an additional Order has been submitted, the trustee appointed in the first insolvency proceeding shall, as far as possible, refrain from any act in respect of the assets of the creditors' pool until the request for the additional Order has been determined.
(c)Once an additional Order has been issued, the insolvency proceedings of the individual shall be consolidated and shall continue in accordance with the additional Order; the court or the Commissioner that issued the additional Order may, within the framework of the additional Order, prescribe provisions regarding the consolidation of the proceedings, including provisions on the following matters:
(1)recognition of proofs of debt submitted in the framework of the first insolvency proceeding;
(2)transfer of the powers of the trustee appointed in the first insolvency proceeding to the trustee appointed upon the issuance of the additional Order;
(3)any other provision that may assist in the management of the additional insolvency proceeding.
(d)The issuance of an additional Order shall not affect the validity of any act performed by the trustee in the first insolvency proceeding.
Debt Arrangement§
185.
(a)The issuance of an Order opening proceedings in respect of an individual shall not derogate from the ability of the individual to submit a proposal for a debt arrangement under the provisions of Part 10: Debt Arrangement outside the Framework of an Order Opening Proceedings.
(b)Upon the approval of a debt arrangement under the provisions of Part 10: Debt Arrangement outside the Framework of an Order Opening Proceedings, the Order opening proceedings that was issued in respect of the individual shall be cancelled; the cancellation of the Order shall not affect the validity of any sale, transfer, payment or other legal act performed lawfully before the cancellation.
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Contact Us →Chapter XII: Insolvency Proceedings in respect of an Individual with Low-Amount Debts
Section A: General
Individual with Low-Amount Debts§
186.
An individual may open insolvency proceedings even if the total of his debts does not exceed NIS 176,923.12, in accordance with the provisions of this Chapter, provided that he is in insolvency or that the Order would assist in order to prevent his insolvency (in this Chapter – individual with low-amount debts).
Opening of Proceedings by an Individual with Low-Amount Debts§
187.
(a)Proceedings may be opened by an individual with low-amount debts in one of the following ways:
(1)submission by the individual to the Registrar of Enforcement of a notice that he is unable to pay the adjudicated debt, under section 7a2 of the Enforcement Law, which is deemed under that section to be a request for an Order opening proceedings;
(2)submission of a request for an Order opening proceedings to the Registrar of Enforcement, provided that the total of his debts exceeds NIS 58,974.37.
(b)Notwithstanding the provisions of subsection (a)(2), the Registrar of Enforcement may issue an Order opening proceedings for an individual whose total debts do not exceed NIS 58,974.37, provided that he found that there are special reasons justifying this, including where proceedings are being conducted against the individual under the Tax Ordinance (Collection).
(c)A request as referred to in subsection (a)(2) or (b) may be submitted to the Registrar of Enforcement at any of the enforcement offices in which an insolvency track operates as referred to in section 189; the individual shall attach to such a request the documents listed in section 104(b).
Management of Insolvency Proceedings before a Dedicated Enforcement Registrar§
188.
(a)Insolvency proceedings opened by an individual with low-amount debts shall be conducted before a dedicated enforcement registrar for insolvency proceedings who meets the conditions prescribed in subsection (b), and the powers vested under this Law in the court and the Commissioner in insolvency proceedings of an individual shall be vested in such registrar, all subject to the provisions of this Chapter.
(b)A dedicated enforcement registrar for insolvency proceedings shall be an enforcement registrar whom the administrator of the enforcement system, in consultation with the Registrar-Supervisor as defined in section 3c of the Enforcement Law, has authorised to serve as a dedicated registrar for insolvency proceedings, after having undergone special training for that purpose; the principal occupation of such a registrar shall be the management of insolvency proceedings.
(c)The provisions of sections 3a, 3b and 73a of the Enforcement Law shall apply to insolvency proceedings conducted before an enforcement registrar under this Chapter.
The Enforcement Office in which Insolvency Proceedings Shall Be Conducted§
189.
(a)Insolvency proceedings opened by an individual with low-amount debts shall be conducted at the enforcement office in which an insolvency track operates, in the district in which the majority of the enforcement files against the individual were opened; in the absence of such a district – the proceedings shall be conducted in the district in which the individual resides or in which his principal place of business or his assets are located, and in the absence of such a district – in Jerusalem.
(b)An insolvency track shall operate in at least one office in each of the districts as defined in section 2(c) of the Enforcement Law; the Minister shall publish in Reshumot (Official Gazette) a notice regarding the enforcement offices in which an insolvency track operates.
(c)Requests and documents relating to the insolvency proceeding may be submitted and information regarding that proceeding may be obtained at any enforcement office.
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