Israeli Family-Law Forum - Bankruptcy

Below are readers' questions about 'Bankruptcy', which have chosen to answer. For further , and more detailed, information on 'Bankruptcy', see our main website, Family Law in Israel, at http://www.family-laws.co.il/other-topics-bankruptcy.

This is extremely unlikely as child support debts are protected in bankruptcy proceedings, and only in the most exceptional circumstances will someone who is declared bankrupt be exempt from a child support debt. For example, as an exception, in extreme circumstances, in September 2013,Tel Aviv District Court granted a debtor,a 75 year old professor in poor health, a complete exemption from all his debts, including a long-standing maintenance debt, concerning a child now in her 40's, but stressed in the ruling that this was an outstandingly rare case, and that in general the exemption given  in bankruptcy proceedings does not cover maintenance debts, and that any claims regarding inability of the debtor to pay back those debts, because of poor health and financial reasons,must be dealt with at the bailiff's office, and not in the bankruptcy court.

The case and a similar one given by Haifa District Court in 2014 were mentioned during a hearing at the Bailiff's in November 2017 where our offices represented a debtor in proceedings regarding an alleged child maintenance debt from the 90's. 

No! An undisputed  maintenance debt is a guaranteed debt in bankruptcy proceedings, and the person against whom it has been made cannot apply for its cancellation just because of the bankruptcy proceedings. If, however,  he has paid the alleged maintenance debt, he is entitled, like any debtor, to challenge it, at the Bailiff's office,and prove that he has paid it. 

Over ten years old! Gifts made  more than ten years previously are 'safe' from bankruptcy proceedings taken against the donor.

No! After a person has been declared bankrupt by the District Court he is prevented by Israeli law from starting or operating a business as a self-employed person.  As well as limitations on freedom of occupation, a bankrupt person faces restrictions on his/her freedom of  movement, too, and cannot travel abroad, without special permission.

Not as a non-bankrupt person can do, as he/she pleases. A person who has been declared bankrupt must apply and get permission for the order preventing him/her from  leaving Israel to be lifted. In order to get the order lifted temporarily, for a limited time, and specified period, he/she must apply for permission,giving reasons and grounds. The application is likely to be passed to the Official  Property Receiver. Meanwhile, the applicant should seek the consent of his Trustee in Bankruptcy, and try and find a few guarantors. Without the consent of the Official Property Receiver and/or the Trustee in Bankruptcy, the bankrupt individual will have to persuade the court to allow him/her to leave Israel for a set period.

Not necessarily - it all depends on whether he was solvent at the relevant time, and whether title of the apartment has been transferred into your name. Gifts given between 2-10  years before the person making them was declared bankrupt still 'hold' if the recipient can prove that the former was solvent immediately after giving them, and that rights in the property have been transferred.

No! A trustee in bankruptcy is appointed to manage the affairs of someone who has been declared bankrupt and has powers to  allocate part of the bankruptee's salary to paying off debts, but must leave enough for that person to survive.