We all know the line, “I have the right.” Yes, we all have the right to do this or that, but sometimes our rights are just intangible dreams. Let’s be wise and learn to compromise.
In this article I will provide a few examples from actual cases in different areas of Israeli life and our legal system. This time we will deal with DEBTS and FINANCES in general.
The most common sentences I’ve heard from new immigrants regarding all different aspect of debts and finances in Israel are the following:
“Why can’t I refinance my debts to the bank/credit card”?
“The bank never told me anything regarding fees when taking a loan”
“It must be a mistake because my original debt to the bank was only half the amount I am been sued for today”
“I had no choice; therefore I signed that new agreement with the bank in order to gain time but now I cannot pay”
“I refused to pay their lawyer’s outrageous bill and because of that they are suing me now”
As I wrote before in my previous article: Ignorantia juris non excusat or ignorantia legis neminem excusat (Latin for “ignorance of the law does not excuse” or “ignorance of the law excuses no one”).
My answers to the above sentences/questions:
“”Why can’t I refinance my debts to the bank/credit card”?
You can try but there is no obligation to agree. Banks and Credit Card companies use a very strict agreement. When you take a new loan or use your credit card, you are doing so under the agreement you signed with them on the day you took that loan or asked for a credit card.
Refinancing is not a common practice in Israel. What the banks call “refinancing” is a new loan and sometimes the interest on this new loan will even higher so be aware.
“The bank never told me anything regarding fees when taking a loan”
The banks (all) charge a very high fee besides the interest and the index, in order to provide you with a loan. They have different names for these fees but in the end they are exactly this: extra fees in order to authorize a loan or in other words, an extra interest added to the interest they already charge you when you take a loan.
“It must be a mistake because my original debt to the bank was only half the amount I am been sued today”
No it’s not a mistake and I can guarantee you that. As soon as a debt is not paid, the bank or any other debtor will open a case in the Otsaa La Foal against you. From that moment the costs (all yours of course) will be extremely high, including high annual interest, index, lawyer’s fees and a long list of other possible fees and expenses. Every “request” the debtor asks such as a lean in your bank account or even a prison order, the cost will be automatically to your total amount therefore a small debt of 1000 shekels can reach a total of 3000 after one year or even less
“I had no choice; therefore I signed that new agreement with the bank in order to gain time but now I cannot pay”
You had at least one more choice! Not to sign but to gain time you did. Now all the previous agreements are null and void. The new contract will most probably be less flexible for you and as you will learn, it won’t make your life easier. Debts don’t disappear when you trade an existing loan or debt for a new! They only get bigger, higher and more difficult to re-pay.
“I refused to pay their lawyer’s outrageous bill and because of that they are suing me now”
When you refuse to pay lawyer’s fees you are in fact refusing to pay the debtor and not his lawyer. All major finance organizations have lawyers they use in order to collect debts. Because these lawyers are paid based on what they actually collect, they will never “waive” their fees. You can try to negotiate but in the end you can be sure you will pay some legal fees.
In conclusion
Take your time before signing any contract. Think, ask questions and ask for help. Remember the old proverb: Fools rush in where angels fear to tread.
A word of wisdom:
I know it is tempting, I know there are good times and bad times but stay away from loans and credit card bills!
