Haifa Court Erases 1.1 Million NIS of Woman's Debt in Insolvency Settlement
The Haifa Magistrates Court approved a debt settlement allowing an unemployed woman to pay 100,000 NIS of her 1.24 million NIS debt in 50 installments. Judge Efraim Chizik ruled that a 30-year-old cautionary note held no real property value.
The Haifa Magistrates Court has approved a debt settlement for a 61-year-old woman, allowing her to pay only 100,000 NIS out of a total debt of approximately 1.24 million NIS. The approved sum will be paid in 50 monthly installments. Judge Efraim Chizik approved the proposal without requiring the liquidation of a property on which a cautionary note was registered in favor of the debtor.
The debtor is a married mother of five who is currently unemployed and relies on state welfare benefits. Her insolvency proceedings began in June 2024. The vast majority of her debt, amounting to approximately 1.05 million NIS, is owed to Bank Leumi, with telecommunications company Cellcom being another creditor in the case.
The Cautionary Note Dispute
A central issue in the proceedings was a cautionary note registered in the land registry (Tabu) 30 years ago in favor of the debtor and her husband on an apartment owned by a relative of her husband.
During the court hearing, her legal representative from the Eti Hassan Law Firm clarified that this note held no actual substance or real value. The defense argued that while there had been an initial intention to purchase the property three decades ago, the transaction was ultimately abandoned due to her husband's medical condition.
Terms of the Settlement
The debtor proposed to settle her massive debts by paying 100,000 NIS spread over 50 installments. The trustee, attorney Amid Mahul, accepted the proposal on the condition that the monthly payment would not fall below 1,500 NIS. The Commissioner for Insolvency was represented by attorney Yaniv Ohana.
Judge Chizik accepted the proposal, citing the woman's bleak economic and employment situation. He noted that her husband also lacks stable employment, resulting in a very low overall household income. Regarding the cautionary note, the judge was convinced that the debtor holds no realizable real estate rights:
"A cautionary note was indeed registered in favor of the couple at the time, but this was part of a purchase transaction that was never completed and never materialized in practice."
Another factor that facilitated the approval of the arrangement was the lack of opposition from the creditors. Bank Leumi explicitly agreed to the debtor's proposal. While Cellcom did not provide explicit consent, it failed to present any objection or attend the hearing, which the judge interpreted as substantive consent.
Under the finalized terms, the debtor will pay 1,500 NIS monthly, with the remaining balance of 25,000 NIS to be paid by the end of the 50-month period to complete the 100,000 NIS settlement.
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