Benny Gantz
Benny Gantz Oren Ben Hakoon/POOL

Defense and Justice Minister Benny Gantz will request that the Ministerial Committee for Legislation promote two bills formulated by the Justice Ministry which deal with the economic fallout from the coronavirus crisis.

The first proposal concerns a route that would prevent thousands of business owners who suffered financial losses during the coronavirus period from reaching insolvency. The second proposal seeks to allow the transfer of checks between banks.

The purpose of the bills is first to assist debtors who wish to initiate debt settlement or insolvency proceedings due to economic difficulties caused by the coronavirus pandemic, and to adapt them to the special characteristics of these debtors.

The unique situation created by the coronavirus crisis has led to the conclusion that the tools and pathways set out in the existing law enacted in 2018 are not enough to help business owners and corporations deal with insolvency.

At this stage, in view of the progress of the national vaccination campaign, and the expected return of economic activity in the coming months, it has emerged that there are businesses and individuals whose debts must be reorganized, and this is the target population the bill seeks to assist.

The bill proposes the creation of a dedicated path for dealing with the debts of debtors affected by the crisis, which will operate for a limited period. This, in an effort to reach an agreed debt settlement to repay the debts as an alternative to full insolvency proceedings. Approval of a debt arrangement as an alternative to an insolvency proceeding in respect of an individual debtor can also be beneficial to his economic rehabilitation due to the active participation required to create the arrangement.

The other bill will make it possible to complete the move that will allow customers to move between banks, known as "click mobility", which will take effect in September 2021 by transferring checks from bank to bank.

The bill allows the new bank to get into the "shoes" of the old bank and honor checks even though they were drawn at the old bank's expense. Thus, the customer will be able to move from bank to bank without canceling the checks or risking them being presented in front of a closed bank account at the original bank and being rejected as checks without coverage..

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