Debt Collection in Israel and Palestine (Palestinian Authority):

Our law firm has over 10 years of experience in debt collection in Israel and the Palestinian Authority (Palestine). 
Creditors will find our law firm's vast experience and knowledge in Israeli and Palestinian matters pertaining to debt collection extremely useful.
 Our law firm handles all debt collection pre litigation actions.  If needed we also provide full in-house litigation services in Israel. 

We offer Skiptracing, credit report and asset tracing services in Israel and Palestine. 

Our law office puts an emphasis on providing prompt, personal and professional debt recovery service in Israel and in Palestine.

We have among our clients international debt collection agencies, law firms, private and institutional clients from countries around the world.

 In short the lawyers at our law firm provide you with a reliable debt collection partner in Israel.

  International Debt Collection:
Through our international network of affiliated law firms and debt collection agencies specializing in international debt collection we are able to offer debt collection services in most countries around the world for both the Israel and foreign based client.  Similar to our Israeli debt collection service the majority of our international pre litigation debt collection service is contingency based (unless client prefers other arragngements).

 Our Debt Collection Working Method
Our debt collection services include pre litigation and litigation services.  Our experienced attorneys do their best to collect without having to resort to litigation.  However if all else fails and debt is not collected in an 'amicable' fashion we inform the client of his litigation options and the chances of retrieving the debt based on the debtor's financial ability.  Of course, we only initiate litigation if we recieve client's written consent for such a step. 
 

Fee Option:
 In Israel contingency ("no win no pay") based fee is allowed in Civil matters only and is not allowed in Criminal matters.
 Our pre litigation attorney fee is usually either contingency based ("no collection no pay"), flat fee or a mix of the two.
 Our law firm's fee for litigation may be based on either hours billed, contingency ("no collection no pay") or a pre paid flat fee, depending on the particular case (factors taken into consideration include but not limited to the complexity, risk and chances of collection in the suit (assets and profession of defendant etc..)).
 It should be noted that Israel Law Bar rules forbid attorneys from paying any court related expenses and  disbursements (including but not limited to court fee, translations if necessary, expert opinion etc...) and therefore these are always paid by client.
 
Legal Demand Letter Only Option:
 For those clients not interested in a contingency based fee structure for the pre legal stage our law firm also offers a legal demand letter service which includes sending a legal demand letter by registered mail, email and fax if possible.  The fee for sending out 1 legal demand letter (no follow up) is 100Euro+vat (18%).

Skiptracing investigations:

Weisblum-Solomon, attorneys at law provides, through an external investigation office, skiptracing services.  This service allows most of our clients to locate the debtors and initiate collection efforts against them.
 
Credit Reports:
 Our law firm can provide translated credit reports regarding both corporations and sole proprietors.  We can also provide asset searches/investigations for individuals.
 
Recognition and Enforcment of Foreign Judgments in Israel:
 Israel is not a party to bilateral treaties with other countries around the world concerning judicial recognition & enforcement of foreign judgments (with the exception of a few countries).  However Israeli courts do  usually allow for both the recognition & enforcement of foreign judgments as long as certain prerequisites are met.  Courts usually grant enforcement & recognition of foreign judgments if the process is done properly and thus cancel the need to open the case once again in Israel resulting in a much quicker and cheaper legal process. 
 
In order to be enforcable/recognized in Israel a foreign judgment must be final with no ability to appeal, the country where judgment was given must allow Israeli judgments to be enforced  and recognized (reciprocety) and the defendant must be made aware of the suit  and be given the chance to defend himself (service on the defendant).  There are some other less important conditions that must also be met  but the above mentioned are the primary prerequisites for Israeli courts to allow enforcement/recognition of foreign judgments.
 Our law firm has vast experience in enforcing and/or recognizing foreign judgments from numerous countries in Israeli courts.  
 

The Benefits of Hiring a Debt Collection Lawyer in Israel:
The reasons for hiring a lawyer/law firm, experienced in Israeli debt collection laws and regulations, are numerous and too many for us to cover.  From our experience of collecting debts in Israel over many years a few reasons for hiring an experienced lawyer to do the job stand above the others and make the difference between a successful debt collection and one that is not, especially when the creditor/client resides abroad:

1.   A lawyer in Israel is a licensed professional whose professional conduct is completely overseen by the Israel Law Bar Association and thus must act in accordance with strict professional codes and guidelines.  When someone in a foreign country handles your money it is most helpful for your own peace of mind to have a professional whose conduct is overseen by a supevisory organization.  Debt recovery agencies in Israel are not supervised and have somewhat of a negative reputation.  If a problem arises with a collection agency which is not a law firm the creditor/client can find that he has no one to turn to.  
 
2.    Another important benefit of using an experienced debt collection lawyer is that a lawyer in Israel is always   personally liable for any money relating to his work.  A law firm can never be a "Limited" company in Israel and thus can never file for bankruptcy or become insolvent.
 
3.    Many debtors believe, for different reasons, that a creditor residing/registered abroad will simply not make the effort to  collect  his debt from them in Israel no matter how big the amount is.  When a debtor receives a letter or a telephone call from an Israeli based lawyer he better understands the consequences of not paying that debt and the creditor's seriousness towards collecting his debt.
 
4.    Debt collection in each country has its own particular set of laws and regulations.  It is therefore vital that  the debt collector conduct the collecting process according to these rules and regulations.  Collectors who  are not lawyers in Israel sometimes harm their case by behaving in a manner inconsistent with those laws  and/or regulations.
  

General Information Regarding Debt Collection in Israel:

-Filing fee in case of litigation is 1.25% of sued amount upon filing and another 1.25% if there is need for testimony to be heard.

-Statute of limitation in most civil matters is usually 7 years. 
 -Filing fee in case of enforcement &/or recognition of a foreign judgment is presently 633 ILS. 
-In debts up to 50,000 ILS creditor can usually go directly to Execution office  without having to go to court as long as there is written proof of debt (e.g. contract).  However if debtor contests the debt it automatically is moved to court for regular litigation.
-Court usually awards the winner some lawyer fee and all court fees.
-Limited companies are usually expected to post a bond to guarantee the expenses of defendant but if the plaintiff Limited company can prove that their financial health is good then this demand is sometimes waved.
-Testimony from abroad can often be heard  through a video link (situated in Israeli courts) and thus there is usually no need for foreign creditors/plaintiffs to testify in person in Israel.
-Courts are closed for summer recess from 16 July until 1 September.
 -Affidavits from abroad must be signed in front of a notary public (and appostilled) or at an Israeli Consulate office (appostille not needed).
 
Appostille: a certification commonly used to refer to the legalisation of a document for international use under the terms of the 1961 Hague Convention, an international treaty that abolished the requirement of legalisation for foreign public documents (that previously might have had to be done at a consulate or the Foreign Office where the notary acted). So nowadays documents which have been notarised by a notary public and then certified with an apostille are accepted for legal use in all the nations that have signed the Hague Convention (this is most western countries, including Israel, the USA, the UK, but not Canada nor Australia).
 
 
Pre legal debt collection process:
The first step in attempting to collect debts in Israel usually begins with a demand letter sent to the Israeli debtor. This step is not a requirement to the filing of a law suit in Israel but it is usually expected as a "good faith" action by the Israeli courts. Our firm also usually goes further and contacts the debtor by other means also if possible.
Since Debtor's Israeli address is sometimes not up to date our firm makes the initial search for the present address at no cost to client. However if our initial search does not succeed we can provide Skiptracing services through an affiliated Israeli investigation office for a fee.
A client can make up his decision regarding litigation by conducting an asset search/investigation or/and a credit search.  Our law firm has been cooperating with trusted investigation and credit checks firm since its establishement 
Litigation
Creditors have some prejudgment remedies available to them. The most important of these remedies is the ability to put a temporary lien on a debtor's attachable assets in Israel which includes cash and accounts receivable. In a few situations creditors from foreign countries which are not signatory to the "Hague Convention of 1 March 1954 on civil procedure"  may be required to post a bond in connections with these procedures.  Usually most foreign creditors from signatory countries whose finances are in fair shape do not have to post a collatreal.
Once the legal action has been initiated in an Israeli court, personal service on the debtor could be arranged in certain situations by the plaintiff's attorney although in most files in Israel it is usually done by the court messenger.
Debt collection files under 50,000ILS in Israel can usually be filed through a "quick court procedure" although this process can sometimes be slowed down by a debtor.
Interest  is usually added to the debt in Israel and is around 8% annually.
Since the  Israeli legal system practices a "loser pays" policy  full court fees (2.5% of the amount sued in case testimony is heard) and some to all legal fees are passed on to the defendant/debtor. Debt collection charges, however, are usually not  passed on to the debtor in Israel.  Foreign plaintiffs suing in Israel who are from countries not signatory to the "Hague convention of 1 March 1954 on civil procedure"  may need to post the equivalent of a bond for these fees on the possibility that the Israeli debtor may prevail .
Execution Office procedure in Israel
If the debtor does not satisfy the judgment after it has been obtained, an action in the Executive of Judgment/Execution office, a separate entity from the courts must be initiated.
The process begins with the issuance of a warning letter to the debtor and the enforcement mechanisms are much like those in European countries and the US.
In Israel, under certain circumstances, a warrant for the arrest of the debtor, confiscation of his passport and his driving license is a possibility.
The interest added on in the Execution office (late interest) is around 13%. All procedure costs are passed on to the debtor.
 
Piercing the Corporate Veil of an Israeli Limited Company:
Probably the biggest problem facing foreign creditors owed debt by an Israeli Limited company/corporation results from bankruptcy or inability of the debtor Limited corporation to pay its debt out of its assets.
This problem is the result of the principle of the "Limited corporation".  As in most advanced economies, stock owners in Limited companies in Israel enjoy broad protection from being held personally responsible for the debts and liabilities of the corporation.  This means that creditors of Israeli companies can only reach as far as the corporation's assets, This means that they can not under ordinary circumstances reach the personal assets of the shareholders of the Limited company.
However, under certain circumstances in Israel, those to whom the Limited company owes money will attempt to "pierce the corporate veil", the legal term usually used to describe an action to have the corporation entity "unmasked" for the purposes of tryng to obtain personal liability on the stock owner (and/or certain people in management position-a wife of a stock owner who runs/manages the company, for example) and thus could result in personal assets being reached.
An action to pierce the corporate veil usually occurs in civil suits when the corporation is believed to have insufficient assets to cover its liabilities to debtors, and the plaintiff/creditor contends that the corporation is actually a fake/sham entity, that is, the corporation is not really a separate individualqentity, but is merely an extension or alias of its shareholders, being used to advance their private interests and not the corporation's or to perpetrate a fraudulent act.

Main Types of Law Suit Tracks
The Israeli Legal System has 3 main types of law suit "tracks" possible for creditors to sue under:
Regular law suit track:  Based largely on the Common Law system the Israeli legal system is adversary (similar to that in other Common Law legal systems).
Fast track: meant for debt under 75KILS (New Israeli Shekels) and was implemented to speed up law suits for such relatively low amount .  This law suit track has prompt deadlines for different statements to be handed in, for hearings to be held (in theory 1-2 hearings) and for a judgement to be given.
Summary Judgment track: Suitable only for debts of which there is written proof/evidence (invoices, contracts etc...) and an exact amount stated on the proof.  Debtor must prove that he has a serious argument in order to be able to defend himself in the law suit.

How Courts in Israel evaluate whether to pierce the veil:

In large, when evaluating whether a corporation is a separate entity/individual  or if the corporate veil should be pierced, courts in Israel may examine the following:
Corporate Formalities:
Did the corporation practice proper procedure in things like appointment of directors, stock offering, the holding of its yearly meetings, the filing of yearly reports with the state agency responsible and how its books and accounts were maintained.  If the corporation was dependent on assets belonging to a shareholder or its finances were mixed with those of its equity owners it may raise a red flag.
Personal Use:
Was the company used to advance the individual shareholder's personal benefit contrary to the company's.
If the Israeli court examines the above mentioned factors and concludes that there is evidence of a unity of interest between the company and its shareholders which goes beyond "natural" and which shows that the two are inseparable, it could decide that permitting the corporate veil to stand would be unjust and thus order the piercing of the corporate veil.
Fraud:
Courts in Israel will usually pierce the corporate veil to prevent fraudulent behavior.  For example if the company was set up in order to protect its owners from liability over a fraudulent operation, and the owners "sneak out" the corporate assets such that the corporation is unable to compensate the victims of the fraud, an Israeli court is likely to set aside the corporation and allow the victims to recover the personal assets of the equity owners.
Changing the corporation's name:
Probably the most prevalent method of hiding behind the corporate shield to escape paying a debt is by changing the company's name (at the Israel Company Registration Office-a part of the Israel Justice Department).  This very quick and rather simple action could sometimes make matters difficult for a creditor wishing to be paid his debt in Israel.
Our law firm has vast experience in filing suits against shareholder personally in such situations.  Some of the facts concerning the "new company" which the court examines are:
a)  Is the line of business of both the old and new companies the same;
b)  Are the same employees employed by both the old and new companies;
c)  Is the place of business of the new company the same as the old one;
d)  Is the machinery/property of the old company used by the new one.
 
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