The Deputy Supervisor of Enforcement Registrars for Insolvency, Registrar Michal Shachnar, recently granted a discharge order to a 43-year-old woman, a mother of three children, who lives on the street. The decision exemplifies the application of the rehabilitative approach of the Insolvency and Economic rehabilitation Law.
The woman, known to and supported by welfare services, suffers from a 73% medical disability and 100% work incapacity until 2027. Her sole income is based on an income support allowance of approximately NIS 1,900 per month, an amount that does not allow for basic dignified living.
In her decision, the registrar noted that after reviewing all the material in the file, the welfare agencies’ reports, and the updated economic data, and after considering the woman’s exceptional and complex life circumstances, she concluded that there are special grounds in her case that justify granting a discharge order.
The registrar stated in her decision that this case reflects “a life story full of crises” and that the woman has experienced a continuous deterioration in her personal, mental, social, and economic situation over the years. Despite the immense difficulties, the woman expressed a deep desire to rehabilitate and change her life path.
“This distress has also been accompanied by profound damage to the woman’s family fabric. Her children do not live with her, and the relationship with them has deteriorated over the years due to her personal situation and lack of housing and financial stability. This is a painful human circumstance that deepens the feeling of isolation and social disconnection, and adds a significant emotional layer to the hardship the woman is experiencing. However, the material indicates that the woman expresses a desire to also rehabilitate the family unit and strengthen the relationship with her children, as an integral part of the overall rehabilitation process she seeks to undergo.”
The registrar also clarified that the continuation of the proceedings is not expected to yield any real benefit for the creditors, as the debtor’s economic situation remains difficult. Her income is extremely low, does not allow for dignified living, and leaves no real surplus for debt repayment.
“Granting discharge in appropriate cases does not harm the principles of justice, but rather serves a broad public purpose: preventing the perpetuation of extreme situations, reducing dependence on welfare systems, and returning individuals who have fallen to the margins of society to a productive, independent, and respectful life path,” the decision stated. In the woman’s case, granting discharge naturally aligns with this purpose, allowing the legal process to become a tool for repair and rehabilitation rather than a mechanism for perpetuating distress.”
At the end of the hearing, the registrar stated in her decision that she was impressed that the woman was at a significant human turning point. “The woman shared that three days prior to the hearing, she celebrated her birthday, and that her central wish is to receive a discharge order and start a new chapter in her life. These words were spoken with simplicity, sincerity, and out of a genuine need for a horizon, and they reinforced my impression that granting discharge is not just a legal step, but represents a real opportunity for a new beginning for the woman. I would also note that beyond the formal legal aspect, it is of real importance that this process also leaves the woman with a sense of hope. Hope is not merely an abstract value, but a fundamental condition for human, mental, and social rehabilitation… I express hope that this decision will enable the woman to hold onto this hope, continue the rehabilitation process, and build a more stable, secure, and dignified future for herself.”
The registrar determined that the discharge order would take effect after the woman completes an economic training course, which she is expected to begin next February. Upon the discharge taking effect, all restrictions imposed on her within the framework of the proceedings will be canceled.
To read the decision, click here.