The Power of the Law

What you should know about the Israeli legal system

More and more new immigrants are unfortunately getting into trouble with “the law”. The majority of the problems concern monetary issues; therefore it is of paramount importance to explain how the system works.

From our experience in the organization, we know today that the main issues are with: Debts to the different Municipalities (“arnona”), legal problems concerning leases, unpaid bills, debts to communication companies (“celcom”, “hot”, “yes”, “pelefone” etc), IBA (“agrat televizia”) and finally banks. These are the main sources of trouble for new immigrants.

Banks

A bank is a financial institution and all it cares about is money and how to make a profit. The banks have very strict rules and one of them is not to give up easily on any amount they are entitled to. The bank will not wait forever and if you do not pay your bills on time, be sure the bank will hand over the case to an external lawyer.

This external lawyer is not paid by the bank on a regular basis; therefore his fees are always paid for those being sued by the bank. This is the reason the lawyers will not give any substantial discount on the legal fees.

The bank does not need to sue a debtor in the “regular” legal process and it is enough to ask for an “enforcement of the debt” using a procedure much easier and faster than a regular case. There is no need to “prove the case” and the only necessary evidence is the papers the debtors have signed when they opened the account along with the latest print out from the account.

A debtor does not have an automatic right to defend himself in the procedure but must ask the court for special permission for a defense. These kinds of requests must be done carefully and the courts will not give permission without a very good reason. You must present a reason and convince the Judge in the request. If denied, the last resource is an appeal and it will be expensive and not very promising.

Banks will try to reach some kind of agreement with the debtor before they send the case to a lawyer but the problem is the limitations in these offers. A debtor will have to pay a substantial monthly payment and in most cases he will find himself not able to cope with the high monthly payment. The bank can and will try to offer a “loan” to cover the same and in the end things can get completely out of control.

The only solution after having the case taken to the bailiffs’ office (“Otsaa la foal”) is to reach an agreement (“Hesder tashlumim”) and pay the debt in small doses. This is a “bad” solution even though it may be the only option.

From the moment you have reached this kind of agreement the debtor will have many limitations he can impose on you such as: a ban on your leaving the country or being able to hold a credit card.

The most painful is the fact that a debtor paying only a monthly small fraction of the total debt will never be able to pay off the debt because of the high interest on the original amount.

Municipal Taxes (“Arnona”) and IBA

The law reserves a special status for these institutions. By being a government institution collecting taxes by law, they have a high status concerning their rights to collect the debt from a debtor. These rights include even the right to break into your house (through the “otsaa la foal” system).

These institutions have the same rights for collecting debts as do the banks.

A Final Word

Imagine David and Goliath where the debtor is a David fighting a Goliath. Add to this the fact that this David is “kind of blind” because he does not know Hebrew and you will understand that you may need more than a lawyer – you will need a small miracle to get away with the debts before crashing under Goliath’s feet.

The rationale behind this imbalance between different forces (the debtor and creditors) is protected by law and everything is according to the rules. Do not try to beat the system, do not try to understand, and remember that by being bitter and complaining you will accomplish absolutely nothing.

Consult with a lawyer before the situation is out of control and especially before the creditor’s lawyers are involved.

 
Sincerely,

 
Tzvi Szajnbrum, Attorney at Law