On 6 February 2018, the Constitution, Law and Justice Committee approved the proposed legislation.
As of that date, Israeli insolvency law was governed by three separate statutes: the Bankruptcy Ordinance, the Companies Ordinance, and the Execution Law.
The new legislation was intended, among other things, to advance the following objectives:
A. Improving the position of small creditors by reducing the categories and scope of debts that currently enjoy statutory priority (and are therefore paid first from the debtor’s estate), thereby increasing the funds available to satisfy the claims of ordinary creditors.
B. Promoting the rehabilitation of debtors by limiting the duration of insolvency proceedings to four years.
C. Combating fraud by granting the Official Receiver criminal enforcement powers.
At the time of publication, the new law had not yet entered into force.
