IsraelLawHow does a foreign creditor register a claim in Israeli insolvency proceedings?
The Insolvency and Economic Rehabilitation Law 5778-2018 (Chok HaChadalut VeShikum Calcali) — which replaced the old Bankruptcy Ordinance in 2019 — governs both corporate and individual insolvency in Israel. Once a debtor is declared insolvent and a trustee or administrator is appointed by the District Court, all unsecured creditors must register their claims by filing a proof of debt (ticun tavioa) with the trustee. A notice of the insolvency and the claims bar date is published in Israeli newspapers and the corporate registry. The law draws no distinction between Israeli and foreign creditors: both have equal rights to file and participate in the distribution of available assets.
A foreign creditor who learns of an Israeli insolvency should act without delay, because the insolvency notice may have been published only in Hebrew-language Israeli sources. The proof of debt form requires: full identification of the creditor (name, address, registration number for companies), the amount claimed in New Israeli Shekels or with the applicable exchange rate, the legal basis for the claim (contract, invoice, judgment, or other instrument), and copies of supporting documents. Contracts drafted in foreign languages should be submitted with a Hebrew translation. Secured creditors — those holding a registered pledge (mashkon) or mortgage over Israeli assets — have separate rights outside the ordinary claims process and are not subject to the same bar date. Once all claims are filed, the trustee prepares a creditors' list, the court adjudicates any disputed claims, and available assets are distributed according to the statutory priority order established by the Law.
- Governing law: Insolvency and Economic Rehabilitation Law 5778-2018 (in force since January 2019); prior cases still governed by Bankruptcy Ordinance 1936
- Competent authority: District Court (Beit Mishpat Mechozi) for insolvency orders; court-appointed trustee (nahag) or administrator (kones) for receiving claims
- Bar date: typically 30–90 days from publication of the insolvency notice — missing this deadline may exclude the creditor from unsecured distributions
- Required documents: proof of debt form, copies of contracts or invoices, any prior judgment; Hebrew translation recommended for foreign-language documents
- Priority order: secured creditors rank first; then preferred claims (employee wages, National Insurance); then ordinary unsecured trade creditors — foreign creditors fall in the ordinary unsecured class unless they hold Israeli security
From the full guide: Collecting a Debt from Israeli Companies: A Practical Guide
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