What happens if the Israeli debtor files for bankruptcy during collection?

If the debtor is an individual, a bankruptcy proceeding under the Israeli Insolvency and Economic Rehabilitation Law 2018 will stay most enforcement actions. You would need to file a proof of debt with the insolvency trustee and compete with other creditors for distribution from the debtor's available assets. Secured creditors take priority. If the debtor is a company that enters liquidation, the same general principle applies — unsecured creditors are paid from whatever remains after secured creditors, employees, and preferred creditors are satisfied.