Israeli pensioner gets rid of debts: a unique court decision and the European experience

In Israel, a 78-year-old woman trapped in debt after selling her apartment to save her son from gambling has been given a chance to start a new life thanks to an unprecedented decision by the judiciary. According to Israel Hayom, the decision was made on October 11, 2026 by registrar Korin Itzhaki of the Office of Judgment Enforcement (Otsaa la Poal) – as part of a new system of “public registrars” created specifically to support the most vulnerable debtors (Israel Hayom).

The story of this woman is a reflection of the many social and human challenges faced by older Israelis. After her son became a prisoner of gambling addiction, she sold the only apartment to help him get out of debt. However, she was without a home, without a car and with a debt of 415 thousand shekels. Despite her advanced age and deteriorating health, she continues to work two jobs at once: according to the court, her total income is about 13 thousand shekels a month, of which a significant part goes to repay loans and current expenses. At the hearing, medical documents were presented confirming the deterioration of her condition, but the woman did not stop working and tried to find a way out of the situation.

Registrar Yitzhaki stressed that the existence of the right to economic rehabilitation does not guarantee that everyone can benefit from it. According to her, “there is a category of debtors who, due to personal and social characteristics, can hardly use the bankruptcy procedure – these are homeless, rehabilitated drug addicts, victims of crime, people with mental disorders and other vulnerable groups.” It is for such cases that the institution of public registrars was created, which allows finding individual solutions that take into account real life circumstances.

As a result, a unique agreement was approved: the woman is obliged to pay 2,000 shekels a month for three years (36 months), after which the balance of the debt - more than 340,000 shekels - will be completely written off. All payments will come directly from the employer to the Office of Judgment Enforcement and distributed among creditors in proportion to their claims. Upon completion of payments, all enforcement proceedings will be closed automatically, without the need for additional court ruling.

The public registrar system was introduced in Israel after the 2019-2021 reforms and aims to help those who are unable to benefit from standard bankruptcy procedures due to age, health or social insecurity. Unlike classic bankruptcy procedures, which require complex documentation and legal support, this mechanism allows you to quickly and flexibly agree on a realistic payment schedule, as well as significantly reduce or completely write off interest and penalties.

International experience shows that similar mechanisms exist in other developed countries, but the Israeli model is particularly flexible and individualized. In Germany, after the 2025 reform, the term of debt relief for individuals was reduced to three years, subject to compliance with all court orders, but the minimum payment is not required - it is enough to cooperate with the manager and transfer part of the income to him. In France, the Bank of France’s over-debt commission can write off debts in a few months if the debtor has no property, and in 2025, 34% of cases ended in full debt cancellation. The UK has a Debt Relief Order (DRO) system for the poor: if debt is up to £50,000 and there are no assets, debts are written off after 12 months, and for larger debts, individual agreements (IVA) are provided for up to 5-6 years.

Thus, the Israeli system of public registrars fits into European practice, but stands out as an opportunity to promptly and specifically help the most vulnerable citizens for whom standard procedures are not available. This not only makes life easier for specific people, but also reduces social tension, allowing creditors to receive at least part of the funds, and debtors to return to normal life.

In the coming years, the practice of using public registrars and the further humanization of the debt collection system in Israel can be expected. This will make it possible to more effectively address the problems of socially vulnerable groups, as well as increase trust in the judicial system and social support institutions.

Financial summary of the case

Indicator Value

Original debt of NIS 415,000

Amount under agreement 72,000 shekels

Monthly payment of 2,000 shekels

Term of payment 36 months

Write-off amount of NIS 343,000

Write-off percentage 82.7 per cent

Repayment rate 17.3%

Sources:

Israel Hayom, ICE, gov.il, DW, Banque de France