Imagine that you are walking on a hot, sunny day on a path without shade, and you are trying to get somewhere—to work, to the grocery store, to pick up the kids from school. Beads of sweat are accumulating on your forehead, and suddenly, out of nowhere, you come to a wall. It is a high and wide wall, made of white bricks, and there is no way out. You want to cross, you have a job or children waiting for you, but you are at an impasse.
This is how a person feels when dealing with debt.
It could be someone who just received a letter that reads, “Legal action will be taken in 30 days unless this debt is paid.” (And, of course, questions arise: What did the debtor manage to understand from the letter? Why does one have to be a legal expert to comprehend it?) Legal proceedings can drag on for years, bringing evictions, foreclosures and other restrictions, with no horizon for settling the mushrooming cloud of debt.
This is the story of Moshe, 26, from the working-class city of Dimona in the Negev. I worked on his case in recent years as part of my previous role at the Joint, where I served as coordinator of the Community Courts program in Beersheba.
Moshe accumulated debts to cell phone providers, to the bank, to the neighborhood grocery store. Foreclosures were imposed on his truck, his salary and his bank account. Almost overnight, he found himself unable to work and support his wife and baby daughter, and incapable of repaying his debts.
A few days after we finally managed to get the restrictions on Moshe’s salary removed, there was a feeling that something was moving forward, that there was a ladder to climb up and get over that wall. But then—I got an urgent phone call from Moshe’s wife: The police arrived and took him to prison!
“What!?” I asked. “Why?”
It turns out that there were several other debts that Moshe had accrued, including a criminal fine from almost a decade ago when he was a teenager. That 500 shekel ($150) fine was not paid and accumulated so much interest that it became a prison sentence.
Not only did Moshe and his wife feel that there was no way out, I also, a lawyer well versed in civil rights and bureaucracy, almost despaired. There was no way to get over this ominous wall, no one who hears, or sees, or recognizes efforts to reach out and move forward.
Even worse is the realization that Moshe’s story is not just about Moshe. Over half a million Israelis are facing legal action over debts. Think about it—that is a whopping 11 percent of the adult population!
And here’s another disturbing statistic: Over 80 percent of these debts are owed to wealthy companies: cellular phone providers, insurance, credit cards, banks, and not to the neighborhood store owner or landlord.
What Does This Mean?
This means that in most cases, we have an individual dealing alone with powerful businesses that have the time and money to wage long and costly legal battles.
But—and this is a big but—in many cases even these companies, with the top lawyers in the world, fail to collect the full debt.
Because every foreclosure, delay, and additional interest charge—every brick in the wall—distances the debtor from the ability to pay what he owes. His financial situation is deteriorating, his family is suffering, and his physical and mental health are being harmed to the extent that no one knows if he will ever be able to settle his accounts.
This Raises the Question: Who Is Really Hurt by This?
Our initial response is that debtors are hurt, but it’s not just them.
The economy is also hurt by cause and effect: People are unable to return to the cycle of productivity and consumption; creditors are unable to collect; and the state loses revenues while being saddled with the high costs of enforcement and legal proceedings.
Think how much money we would have saved—for all of us—if only we had been able to help Moshe settle his debts at an earlier stage, if he knew about them and understood their meaning. He could have avoided the legal problems that made his life an economic and mental hell. How much money and heartache would it save us all?
Well, it turns out that the wall of debt that threatens so many households in Israel—especially today in the wake of the coronavirus crisis—is not a fait accompli. The good news is that the Israeli legal and economic system has long understood that the problem of household debt requires innovative and creative solutions. New legislation is more sympathetic to debtors, facilitating efforts to ease bureaucracy and settle their accounts. This heralds a new and positive trend.
The Joint, in partnership with government ministries and non-governmental organizations, is developing a model to break through the wall of debt based on four working principles:
- A Ladder – Providing economic, social and legal assistance
- Removing Bricks – Systemic change by offering access to services and shifting attitudes toward debtors
- Scaling the Wall – Promoting cooperative legal proceedings based on agreements
- Reaching the other Side – Allocation of resources to finance debt relief
For someone like Moshe, any of these four principles could have helped him break through the wall.
What Finally Happened to Moshe?
With the help of several determined advocates for justice and one compassionate policeman, we managed to prevent Moshe’s imprisonment. He received a reprieve of one week, during which he raised enough money for a down payment and reached an agreement to pay off the rest in installments. He is still climbing the ladder, paying off his debts every month, and I hope that very soon, he will cross over the wall, complete his settlement, and open a new financial chapter in his life.
But the question I ask myself is this: Did it really have to come to this? Was there no better way than to come to his house with a police car and to imprison him for a debt of 500 shekels from ten years ago?
I believe the secret lies in a combination of solutions based on our four working principles. Ultimately, the story of Moshe’s debt is the story of us all. Breaking down the walls of despair and bureaucracy facing the debtors is in the common interest. Because as we have seen, when one person owes, a great many people pay.