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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

This English text was translated from the official Hebrew using a range of translation tools, and it undergoes ongoing checks and updates. It is not a certified translation.

Despite these checks, it may contain errors, omissions, or imprecise renderings of legal terminology and cross-references, and it may not yet reflect the latest amendments. It cannot be relied upon as a legal text.

The Hebrew text as published in Reshumot (ספר החוקים) and on the Knesset website is the sole authoritative and legally binding version. In any discrepancy, the Hebrew text prevails.

This translation is provided for informational purposes only and does not constitute legal advice. For use in legal proceedings, request a certified Expert Legal Opinion.

Section B: Formulation of a Payment Arrangement

Decision of the Registrar of Enforcement on Proceedings for the Formulation of a Payment Arrangement§
190.
(a)Where the Registrar of Enforcement has found, after examining the request for an Order opening proceedings submitted by an individual with low-amount debts and the documents attached thereto, and also, where required, the information received from a body listed in section 104(b)(3), that the conditions listed in sections 186 and 187 are fulfilled, he shall, within 30 days from the date of submission of the request, direct that a session be convened for the formulation of a payment arrangement.
(b)Where the Registrar of Enforcement considers that the request and the documents attached thereto and the information received from a body listed in section 104(b)(3) are insufficient to reach a decision on the request, he may require the individual to provide additional information needed for that purpose or summon him to a hearing before him; where the Registrar has so required, he shall render his decision within 30 days from the date of receipt of the information or the end of the hearing.
Holding of a Session for the Formulation of a Payment Arrangement§
191.
(a)Where the Registrar of Enforcement has directed that a session be convened for the formulation of a payment arrangement, an employee of the enforcement system authorised for that purpose by the administrator of the enforcement system (in this Chapter – the Registrar's representative) shall send a summons to the session to the individual and to the creditors named by the individual in his request for an Order opening proceedings.
(b)The session for the formulation of a payment arrangement shall be held at the place and time to be prescribed in the summons, provided that it takes place within 30 days from the day on which the Registrar of Enforcement directed that it be convened; the Registrar's representative shall conduct the session.
(c)The individual who submitted the request is required to appear at the session and to cooperate with the Registrar's representative.
(d)For the purpose of formulating the payment arrangement, and to the extent required therefor, the Registrar's representative may examine the documents attached by the individual to the request for an Order opening proceedings and may require any body listed in section 104(b)(3) that holds information about the individual as referred to in that section to provide that information to him.
(e)At the beginning of the session, the Registrar's representative shall explain to the parties the nature of the payment arrangement formulation proceeding and their rights and obligations within it, including clarifying to the individual what his rights and obligations will be, among other things his right to a living allowance, if an Order opening proceedings is issued in respect of him.
(f)The Minister may prescribe provisions regarding the qualifications required of Registrar's representatives, and may, with the approval of the Constitution, Law and Justice Committee and notwithstanding the provisions of subsection (a), prescribe that the power vested under this Section in the Registrar's representative shall be vested in a person who is not a State employee, and prescribe provisions regarding his qualifications and remuneration.
(g)The administrator of the enforcement system shall prescribe procedures regarding the summoning of payment arrangement formulation sessions, their dates and the manner of their conduct, and shall supervise their holding, inter alia by carrying out periodic inspections.
Agreed Payment Arrangement§
192.

Where the Registrar's representative has formulated, at a session convened under section 191, a payment arrangement to which the individual and all the creditors who are parties to the arrangement have agreed, the arrangement shall be binding on the individual and on those creditors, and the Registrar of Enforcement shall direct the stay of enforcement proceedings or the closure of the enforcement files, in respect of the individual's debts to which the arrangement applies, all in accordance with the provisions of the arrangement.

Transfer of a Payment Arrangement for Hearing before the Registrar of Enforcement in the Absence of Agreement§
193.

Where the Registrar's representative has formulated, at a session convened under section 191, a payment arrangement but not all the creditors who are parties to the proposed arrangement have agreed to it, and in the view of the Registrar's representative there is a reasonable prospect of the arrangement being approved under the provisions of this Section, the Registrar's representative shall transfer the arrangement he has formulated to the Registrar of Enforcement, provided that all of the following are met:

(1)the individual has agreed to the payment arrangement;
(2)the arrangement does not apply to secured debts.
Convening of a Creditors' Meeting and Hearing on a Proposed Payment Arrangement in the Absence of Agreement§
194.
(a)Where the Registrar's representative has transferred to the Registrar of Enforcement the payment arrangement formulated under section 193, the Registrar of Enforcement may, if he found that there is a reasonable prospect of the arrangement being approved under the provisions of this Section, convene a creditors' meeting to be held before him for the purpose of deliberating on the arrangement and voting on it.
(b)The Registrar of Enforcement shall summon to the creditors' meeting the creditors who are parties to the proposed arrangement and the individual, and shall attach to the summons a copy of the arrangement; where the individual has received a summons as aforesaid, he shall appear at the creditors' meeting.
(c)At the creditors' meeting, the Registrar of Enforcement shall hold a deliberation on the payment arrangement formulated by the Registrar's representative, and may conduct, within the framework of the deliberation, a means examination of the individual under the provisions of the Enforcement Law, in the presence of the creditors.
(d)At the end of the deliberation on the payment arrangement and if he found that the individual agrees to the arrangement and that it does not constitute an abuse of the insolvency proceedings, the Registrar of Enforcement shall bring the arrangement for the approval of the creditors at the meeting.
Approval of a Payment Arrangement at the Creditors' Meeting§
195.
(a)A payment arrangement shall be deemed to have been approved by the creditors at the creditors' meeting if all of the following are fulfilled:
(1)the arrangement was supported by a majority of the voting creditors among the creditors in respect of enforcement debts who are parties to the proposed arrangement, the creditors together holding at least three-quarters of the total of such debts;
(2)the arrangement was supported by all the creditors who are parties to the proposed arrangement who hold debts that are not enforcement debts.
(b)A creditor shall exercise the right of vote afforded to him in good faith and in the customary manner and shall refrain from an abuse of his power.
(c)In this section –

"enforcement debts" – debts in respect of which a proceeding has been opened under the Enforcement Law and also debts under a judgment in respect of which such a proceeding may be opened, even if one has not yet been opened;

"voting creditors" – excluding those who abstained in the vote.

Approval of a Payment Arrangement by the Registrar of Enforcement§
196.
(a)Where a payment arrangement has been approved by the creditors at the creditors' meeting, the arrangement requires the approval of the Registrar of Enforcement.
(b)In considering whether to approve a payment arrangement, the Registrar of Enforcement shall take into account, inter alia, considerations relating to the fairness of the proceeding, and may make the approval of the arrangement conditional on the individual undergoing training in proper economic conduct, if he found that the circumstances that led the individual to insolvency indicate that the training would assist in his economic rehabilitation; the provisions prescribed under section 161(b)(5) shall apply to the training.
(c)The Registrar of Enforcement shall not approve a payment arrangement if he is satisfied that the consideration offered to a creditor who did not support the arrangement is lower than the consideration that that creditor would have received had an Order for economic rehabilitation been issued in respect of the individual.
Effect of an Approved Payment Arrangement§
197.
(a)Where a payment arrangement has been approved by the creditors at the creditors' meeting and by the Registrar of Enforcement, under the provisions of this Section, the arrangement shall be binding on the individual and on those creditors.
(b)An individual may not be discharged in an approved payment arrangement as referred to in subsection (a) from debts that are not dischargeable.
(c)Where a payment arrangement has been approved as referred to in subsection (a), the Registrar of Enforcement shall direct the stay of enforcement proceedings or the closure of the enforcement files, in respect of the individual's debts to which the arrangement applies, all in accordance with the provisions of the arrangement.
Preservation of the Individual's Right to Formulate a Debt Arrangement§
198.

Nothing in the provisions of this Section shall 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.

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Section C: Order Opening Proceedings

Issuance of an Order Opening Proceedings by the Registrar of Enforcement§
199.

Where no agreed payment arrangement or arrangement approved by the creditors and the Registrar of Enforcement has been formulated, in accordance with the provisions of Section B: Formulation of a Payment Arrangement, the Registrar of Enforcement shall issue an Order opening proceedings in respect of the individual with low-amount debts.

Application for Revocation of an Order Opening Proceedings§
200.
(a)A person who considers himself aggrieved by the grant of an order opening proceedings issued by the Registrar of Enforcement and Collection pursuant to section 199, in respect of an individual with low-amount debts, may submit to the Registrar of Enforcement and Collection, within 45 days of the date of publication of the notice of the grant of the Order, an application for its revocation.
(b)The provisions of section 108 shall apply, mutatis mutandis, to an application under subsection (a) and to the hearing thereof.
Application of the Provisions of the Law§
201.

Upon the grant of an order opening proceedings in respect of an individual with low-amount debts pursuant to section 199, the provisions of this Law applicable to insolvency proceedings of an individual conducted pursuant to an order opening proceedings issued by the Official Receiver shall apply, mutatis mutandis and subject to the modifications set out in this Chapter, to the insolvency proceedings of the individual conducted before the Registrar of Enforcement and Collection.

Vesting of the Official Receiver's Powers in the Registrar of Enforcement and Collection§
202.

The powers vested in the Official Receiver under this Law in respect of insolvency proceedings of an individual conducted pursuant to an order opening proceedings issued by the Official Receiver shall be vested in the Registrar of Enforcement and Collection in respect of insolvency proceedings of an individual with low-amount debts conducted before him, except for the following powers:

(1)the power to prescribe provisions and to issue general directives pursuant to this Law;
(2)the power to be a party to proceedings conducted before a court;
(3)the power in respect of insolvency proceedings of an individual who has died, pursuant to Chapter X: Provisions in respect of an Individual Who Has Died;
(4)the power to investigate the conduct of the trustee pursuant to section 274; however, the Registrar of Enforcement and Collection may request the Official Receiver to investigate the trustee; if the Official Receiver finds that information that has come to his attention pursuant to that section is capable of affecting proceedings conducted before the Registrar of Enforcement and Collection, he shall transmit that information to the Registrar.
Power of the Registrar of Enforcement and Collection to Issue an Economic Rehabilitation Order§
203.
(a)The power to issue an economic rehabilitation order pursuant to Chapter VIII: Economic Rehabilitation Order, in respect of an individual with low-amount debts against whom an order opening proceedings has been issued pursuant to section 199, shall be vested in the Registrar of Enforcement and Collection.
(b)The Registrar of Enforcement and Collection shall issue the economic rehabilitation order after holding a hearing on the investigation findings report submitted to him by the trustee pursuant to section 153, to which the individual and the creditors have been summoned, and the provisions of Section C: The Official Receiver's Proposal for an Economic Rehabilitation Order and the Hearing Thereon, of Chapter VII, shall not apply.
Vesting of the Court's Powers in the Registrar of Enforcement and Collection§
204.

The following powers vested in the court under this Law shall be vested in the Registrar of Enforcement and Collection in respect of insolvency proceedings of an individual with low-amount debts conducted before him:

(1)the power to terminate the tenure of the trustee pursuant to section 140;
(2)the powers in respect of the economic rehabilitation order, pursuant to Chapter VIII: Economic Rehabilitation Order;
(3)the powers in respect of the application of the discharge and the revocation of the discharge pursuant to sections 175 and 176;
(4)the power to allocate an amount to be paid to a person entitled to maintenance from the individual pursuant to section 179(a)(2);
(5)the power to revoke an order opening proceedings on account of the individual's conduct, pursuant to section 183;
(6)the power to approve the rejection of a debt claim in respect of a debt for which a judgment has been given, pursuant to section 211(b);
(7)the power to approve the withdrawal of funds from a provident fund pursuant to section 228;
(8)the power to approve the sale of a right in real property serving as the individual's residence pursuant to section 229;
(9)the powers in respect of the realisation of a charged asset pursuant to section 248;
(10)the power of examination pursuant to section 281;
(11)the power to issue an order directing a person summoned to a clarification or examination to appear, pursuant to section 282;
(12)the power to issue an order directing the seizure of an asset or document of the individual, pursuant to section 283;
(13)the power to issue to the individual an order for the stay of departure from the country, pursuant to section 284;
(14)the power to revoke an order opening proceedings on grounds of absence of insolvency, pursuant to section 286.

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Section D: Miscellaneous Provisions

Power of the Registrar of Enforcement and Collection Not to Appoint a Trustee§
205.

The Registrar of Enforcement and Collection may refrain from appointing a trustee if he finds that there is no justification for doing so in the circumstances of the matter, for reasons that shall be recorded; should the Registrar so decide, he shall fulfil all the functions of the trustee under this Law.

Right of a Creditor to Apply to the Registrar of Enforcement and Collection§
206.

Notwithstanding the provisions of section 259, a creditor shall apply to the Registrar of Enforcement and Collection on any question concerning his rights in the insolvency proceedings in matters within the jurisdiction of the Registrar of Enforcement and Collection under this Chapter.

Transfer of the Management of Proceedings from the Registrar of Enforcement and Collection to the Court§
207.
(a)The Registrar of Enforcement and Collection, 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 of an individual with low-amount debts are being conducted, with a request to transfer the management of the proceedings to the court.
(b)The President of the Magistrate's Court to whom an application has been submitted pursuant to subsection (a), or another judge of the Magistrate's Court whom he has authorised for that purpose, may transfer the management of the insolvency proceedings to the court, if he is of the opinion that, owing to the complexity of the proceedings or for the benefit of their efficient management, it is appropriate that they be conducted in the court.
(c)Where the management of the insolvency proceedings has been transferred to the court pursuant to this section —
(1)all powers of management 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 for directions.
Transfer of the Management of Proceedings from the Registrar of Enforcement and Collection to the Official Receiver§
208.

Where one of the following has occurred, the Registrar of Enforcement and Collection shall direct the transfer of the management of the insolvency proceedings in respect of an individual with low-amount debts to the Official Receiver:

(1)the Registrar of Enforcement and Collection has found, in the course of the insolvency proceedings, that the total debts of the individual significantly exceed NIS 176,923.12;
(2)an application has been submitted to the court pursuant to section 133(c), for the clarification of a dispute concerning the individual's right in an asset or document that the trustee has demanded be transferred to him;
(3)an application has been submitted to the court for the avoidance of an act conferring preference on a creditor, an act diminishing an asset from the creditors' fund, or an act of fraudulent transfer of an asset, pursuant to Section B: Avoidance of Transactions that Diminish the Creditors' Fund, of Chapter II of Part 4.

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