Many people encounter financial difficulties due to different reasons: be it as a result of improper financial management, unexpected bills due to medical reasons, low income that is not proportional to the client's expenses, etc. The cost of living in Israel increased this phenomena with Israelis who are having difficulties in keeping up the heavy financial weight.
Among the most common actions taken as a result of financial difficulties, are: taking out many loans (sometimes from the gray market), opening bank accounts, accumulating many credit cards, and distributing defaulted checks. Sometimes, the situation is such that the client takes out a loan in order to pay off other loans. This can cause the client to get into a spiraling horror circle of financial debts from which he cannot get out. The final result could be a restricted bank account, and a referral to the collection authority.
Sanctions Due to Debts with the Collection Authority
Every person that has debts with the collection authority is subject to different sanctions: seizures at the bank, asset seizure, restriction of driver's license, eviction, and other sanctions that can prove to be a heavy hit on the lifestyle of the debtor.
Dealing with Debts with the Collections Authority
In order to deal with debts that are with the collections authority, and prevent the sanctions that accompany them, there are several actions that can be taken. The first option is to turn to the official receiver with the collections authority, and a request an inquiry into the debtor's ability, after which the debtor will have to make monthly payments. If the debtor keeps up with the payments, he won't have to suffer the sanctions.
The second option is consolidating the debtor's files. This option is viable if the debtor has several files with the collections authority. The debtor will submit a request to consolidate all of the files into one file to prevent the "runaround" of dealing with all of the files, and unite all of the debts into one debt. The debtor must pay a monthly payment of 3% of the entire debt.
The third option is entering into a status of restricted means. This option is available in cases where the debtor is unable to pay the entire debt, and he can submit a request to be ordered to make monthly payments that are based on the debtor's financial ability. A person that is listed as of restricted means will be subjected to temporary sanctions of stay of exit, restricted bank account, prohibition of getting, and usage, of checks and credit cards, prohibition of managing and opening a business.
Restriction of a Bank Account
One of the sanctions imposed in cases where the debtor doesn't pay his debts, is restricting his bank account. Many clients do not fully understand the meaning of such a restriction, and take it lightly. From the moment that a bank account is restricted, the client is prohibited from opening a new bank account (with all banks), the bank will not provide the client with new check books for the entire period of the restriction, which is one year, and will not honor checks used from a restricted account.
In severe cases, where the client enters a strict restriction status, all accounts under his name, in all of his banks, will be restricted, and he will not be provided with new check books for a period of two years! In addition, the client's entering a status of restricted account it is reported to all banks, and leaves a dark stain that remains with the client in the future, and will make it difficult for him to handle himself financially with the banking system.
In order to deal with these debts, it is necessary to act accurately, which is why it is recommended to use the legal services of a collections attorney. An attorney will handle the procedure quickly and professionally while inspecting all relevant legal aspects and parameters. This service can assist in the dismissal of the bank account restriction, and in reaching better debt settlements for the debtor, be it by spreading the payments in a way that eases the process on the debtor, or by significantly lowering the amount of the debt.