During 2020, 22,246 applications were filed for bankruptcy - a jump of about 36%

During 2020, 22,246 applications were filed for the opening of insolvency proceedings for individuals (formerly called bankruptcy applications). This is a jump of about 36% in the total number of insolvency applications submitted compared to 2019, in which 16,373 applications were submitted.
17,495 applications were submitted to the Commissioner for Insolvency and Economic Rehabilitation Proceedings (ICRC) and 4,751 applications were submitted to the Enforcement and Collection Authority (applications in which the scope of the debts is less than NIS 150,000). It should be noted that the corona year began in March 2020 and it should be assumed that 2021 will also be affected by the economic crisis that accompanied the corona epidemic. The data are part of the activity summary report for 2020 published today (Monday) by the Custodian General, Insolvency and the Registrar of Inheritance Matters.
The Commissioner for Insolvency and Economic Rehabilitation is the body entrusted by the State with the management and supervision of insolvency proceedings, which include insolvency of individuals, insolvency of corporations, bankruptcy of individuals, liquidation proceedings of companies, recovery of companies and creditors' arrangements. In this context, the Commissioner is responsible for the work of the trustees appointed in insolvency proceedings. The commissioner's report shows that during 2020, 17,717 bankruptcy or insolvency cases of individuals were closed, compared with 16,695 bankruptcy cases in 2019. This is a 6% increase in the number of individual cases closed compared to 2019.
In the field of liquidation of companies during the year 2020, 1,200 applications for liquidation and insolvency of corporations were submitted, compared to 2019 in which 1,179 applications were submitted. This is an increase of less than 2% in the volume of insolvency proceedings of corporations. And what about debt claims filed by creditors against debtors or against companies in difficulty? During 2020, the use of filing debt claims was expanded online, and about 99% of all debt claims were filed online. It also shows that during 2020, debt claims amounting to NIS 33 billion were submitted to the Commissioner. Of the above amount, a total of NIS 18 billion was filed in insolvency proceedings of individuals, and a total of NIS 15 billion was filed in insolvency proceedings of corporations.
In June 2020, at the height of the Corona crisis, 2,038 bankruptcy applications were filed compared to 1,165 applications in June 2019 - a 75% jump. The insolvency commissioner's report released today confirms that indeed throughout the corona year, 2020, there was a 36% increase in insolvency applications (bankruptcy) compared to 2019. But it is important to understand that the economic corona crisis is not the only factor causing a jump in bankruptcy applications.
Another factor that led to the increase in the number of applications is the new Insolvency and Economic Rehabilitation Law that came into force in September 2019. The new law replaced the old bankruptcy ordinance and essentially came to rehabilitate the debtor rather than punish him and help him reach a settlement with his creditors. Proponents of her case have been working to make the actual transcript of this statement available online. In July 2020 it was announced that in the first quarter of 2019 4,401 bankruptcy applications were filed, and in the first quarter of 2020 (before the outbreak of the corona and after the law came into force) 6,286 applications were filed - an increase of 42%. So the corona is not the only reason.