Debt Collection for Companies

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In Israel, if you own a company, whether big or small, you would at some point have debt collection issues to deal with. Knowing your rights as an owner as well as the legal procedures are key to a successful and stress-free business venture.


From a legal standpoint, there is a difference between being a private individual and a company. A company is an entity that can be owned either by one or more individuals and, therefore, is treated differently when it comes to debt collection. Companies have several solutions to debt collection, some of which can be flexible and advantageous to the company, though this largely depends on how experienced a lawyer is in debt collection. For debt collection from a private individual however, approaches can vary, among other things, depending whether or not the company is a limited company. In other words, each case is unique and needs to be treated likewise.

Debt Collection

This is a phenomenon that has become increasingly prevalent in recent years. In Israel, for instance, it is not uncommon to see checks being returned and businesses going bankrupt. Going through bankruptcy, whether as a business or company, is no doubt highly unpleasant. However, the consequences of bankruptcy on creditors can make it more challenging. Almost every business accumulates debts whether it is from paying its suppliers, employee salaries, or meeting other expenses. Not being able to pay off a debt by a certain date further leads to a debt build-up that can amount to billions of shekels every year! So, it is important to know what can be done in such dire situations and the possible ways to get out of them. Are there ways to collect the debt or is it lost? 

Lost Debts: Do not Lose Hope!

If you have a lost debt, you will be encouraged to know that most of the debts are indeed paid off, even if it is a debt settlement that spans months or even years. But in order for debts to be paid off, it is important to act on time. Surveys and studies have shown that chances of collecting debt decrease significantly over time. One possible explanation for this is the fact that you are probably not the only creditor of that company/business. While other creditors are working to collect the debt through lawyers and other execution bodies, you may not be doing so, thus your chances of collection only decrease with time.

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