Our latest report, written by Attorney Reut Cohen, reviews the failures of Israel’s debt collection system and offers solutions for legislative and policy reform.
Against the backdrop of the cost of living, the availability of credit, the unraveling of the social security net provided by the state, and the policy of privatization of social services over recent decades, debt repayment has become one of the main problems facing residents of the State of Israel. The Committee for the Fight against Poverty (the “Alalouf Committee”) rightly noted that debts are a key difficulty for people living in poverty, since they constitute a barrier to overcoming poverty and a significant factor in its exacerbation. This conclusion was raised repeatedly in our discussions with people living in poverty and with grassroots professionals who work with families facing economic distress.
From the perspective of human rights laws, debt has a profound impact on people from the lower-middle class and on people living in poverty. The presence of debt, and more specifically the inability to repay debt, poses a real risk to the basic rights of debtors and their families to a dignified existence, including decent living conditions, shelter, nutritional security, health, and education. Despite these ramifications of debts of private households, as well as others – such as the impact on national economic stability – Israel has not adopted a broad-based national policy designed to provide optimum responses and solutions for debtors and to help them move out of debt and poverty. Accordingly, we believe that it is vital to place the debt crisis on the public agenda. Policy makers must acknowledge the problem and define a clear vision for resolving it.
We at the Association for Civil Rights in Israel (ACRI) have chosen as our first area of focus the debt collection system in Israel – a system that is diffuse, inconsistent, and can potentially cause serious damage to the human rights of debtors. However, it is important to note that an overall solution of the debt crisis must also address the stages that precede the creation of debt and collection, and the various responses required in these stages. Actions required in this context will include cutting the cost of vital services (municipal tax, water, and electricity); reinforcing the welfare services; increasing baseline benefits; strengthening the Employment Service; providing supervision and education on proper economic behavior; tightening regulation of the credit market; encouraging creditors – particularly from the public sector – to reach fair installment arrangements before initiating collection proceedings, and so forth.
Please click here to access the report in English and in Hebrew.
Please click here to read Attorney Reut Cohen’s article: Aggressive Debt Collection Harms Citizens that was published in The Marker.
