Jasimin Gueta and Arik Mirovsky
The number of bankruptcy filings has been on the rise and in the past five years, the number of bankruptcy petitions granted by courts has tripled, according to a new report summarizing the activities of the Justice Ministry’s administrator general and official receiver last year.
There were 1,761 bankruptcy judgments awarded in 2008, while last year the figure jumped to 5,610, the administrator general, David Hahn, stated in his report. In 2011, 3,737 bankruptcy judgments were awarded and the following year, 2012, the numbers were up to 5,000.
The report also noted a rise in the number of cases in which an official receiver has been appointed by the courts. The receiver’s task includes managing the debtor’s assets and determining whether a settlement can be reached with creditors rather than having the debtor declared bankrupt. Last year receivers were appointed in 11,256 cases, 9% more than in 2012 and 38% more than in 2011.
Staff at the Official Receiver’s Office explain that the increase in the number of cases in recent years is not just the result of difficulties caused by the global financial crisis that erupted in late 2008. It is also prompted by a change in the law the following year that required that certain debtors be advised of the option of filing for bankruptcy. In 2013, a provision of the law also came into effect that streamlines the bankruptcy process for many debtors.
In his capacity as administrator general of the State of Israel, Hahn is responsible for handling bequests and contributions that are made directly to Israel by individuals rather than their being directed to a specific charity or institution. The office also manages assets that are unclaimed or that have been confiscated from criminals, As of the end of 2013, the administrator general had 14,243 active files involving cash and real estate and total assets of 1.83 billion shekels ($469 million).
Last year, the Israel received nearly 200 million shekels in bequests, a 110% increase over 2012. The assets are distributed to organizations based on the instructions of the deceased. If no such instructions were provided, the money is distributed based on guidelines set by a public committee.