The Knesset has aimed to update the law on insolvency by passing the Law of Insolvency and Economic Rehabilitation.
This has arisen as a result of the current insolvency laws being considered to be regulated under outdated legislation, being disorganised and having had a detrimental effect on debtors, creditors, and the economy. The incoming Law will take effect in 18 months' time and is designed to rectify the situation and provide the Israeli economy with modern legislation with respect to insolvency.
The Law has three primary objectives:
- To promote the debtor’s economic rehabilitation as a primary concern
- To maximise the debt repayment to creditors and to divide the debtor’s pool of assets in a more equitable manner between secured and unsecured creditors
- To increase the certainty and stability of the law by streamlining processes and reducing the bureaucratic burden.