Free Consultation
Debt Collection

Can a creditor in Israel add attorney fees and statutory interest to the amount being collected from a debtor?

Yes to both, but under specific rules. Statutory linkage and interest accrue automatically on any monetary court judgment from the date it is entered, under the Adjudication of Interest and Linkage Law 5721-1961. Attorney fees are awarded at the court's discretion at the end of proceedings — they are not automatically added. Where the parties' contract contains a provision for collection costs or attorney fees, Israeli courts will generally enforce a reasonable contractual fee clause. Post-judgment interest accrues at a rate set quarterly by the Minister of Finance, currently approximately 5–7% per year, plus CPI linkage to adjust for inflation.

Under the Adjudication of Interest and Linkage Law 5721-1961, a court-ordered debt in Israel automatically attracts two adjustments from the date judgment is entered: linkage to the Consumer Price Index (madad), which adjusts the principal for inflation, and interest at a rate set quarterly by the Minister of Finance. The combined effect means a debt left unpaid for several years can grow substantially in real terms even before enforcement costs are added. If the underlying contract specifies a higher contractual interest rate, Israeli courts will generally apply it — but courts have set aside rates they find unconscionable under the Standard Form Contracts Law 5742-1982. For attorney fees, Regulation 512 of the Civil Procedure Regulations allows the court to award a reasonable fee to the winning party at its discretion. Courts routinely award partial legal costs — typically a fraction of actual fees in straightforward collection cases — with higher awards reserved for matters where the debtor conducted proceedings in bad faith or significantly delayed. The full debt collection process is explained in Debt Collection in Israel: A Complete Legal Guide.

After obtaining a court judgment, a creditor opens an enforcement file with the Execution Office (Lishkat HaHotzaa LaPoal) by paying a filing fee of approximately NIS 1,000–1,500 (2026). The Execution Office then adds its own administrative fees and any bailiff costs to the debtor's account, and these amounts form part of the enforced debt — meaning the debtor ends up paying not just the original judgment amount but also the enforcement overhead. Foreign creditors who obtained a foreign court judgment recognized in Israel under the Foreign Judgments Enforcement Law 5718-1958 can also claim interest accruing from the date of the original foreign judgment; Israeli courts have recognized that calculating interest only from the date of local recognition would unfairly benefit debtors who deliberately delay recognition proceedings.

⚖ In Practice
  • Governing law: Adjudication of Interest and Linkage Law 5721-1961; Civil Procedure Regulations Regulation 512 (costs)
  • Competent authority: Execution Office (Lishkat HaHotzaa LaPoal) for post-judgment enforcement
  • Interest rate: set quarterly by Ministry of Finance; approximately 5–7% per year plus CPI linkage (2026) — verify the current quarterly rate on the ITA website
  • Execution file fee: approximately NIS 1,000–1,500 to open (2026); additional bailiff and administrative costs are added to the debtor's account
  • Contractual interest: courts enforce reasonable contractual interest rates; excessive or unconscionable rates can be challenged and reduced by the court

From the full guide: Debt Collection in Israel: A Complete Legal Guide

Related Questions

Related Guides

Need legal help with this topic?
Get a Free Consultation with Adv. Eli ShimonyPrepared under the direction of Adv. Eli Shimony, Eli Shimony Law Office · Editorial policy

← Browse all Q&A