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Principles for Calculating the Amount Necessary for Living in Dignity

© Vadim Lerner,

In the 2018 Insolvency Law, it was decided that the Minister of Justice will determine the regulations to calculate the amount necessary for living in dignity for an indebted person and their family in the process of insolvency; a governmental committee was established for this purpose. Along with the Civil Litigation Clinic in Haifa University, we sent the committee a document detailing the principles for action, components that should be included in the calculation model, and the advantages and disadvantages of two potential models currently existing in Israel.

In our opinion, any model for calculating the cost of dignified living should be based on fundamental principles of constitutional human rights, and specifically the rights to dignity, dignified living, and equality. The model should simultaneously account for both the essence of the Insolvency Law and economic rehabilitation, and the socio-economic interests of the State. According to this, every model for calculating the cost of dignified living should be based on the following principles:

1. Maintaining the dignity of an indebted person and their family throughout the process, via:

a. Permitting for sufficient means, based on a realistic and measurable basis, for the dignified living of the indebted and their family in various life circumstances.

b. Maintaining the life structure of the indebted and their family.

2. Aiming for the rehabilitation of the indebted, and their inclusion in the economy and the job market. The principle is based not only on the rights of the individual, but on a superseding socio-economic interest.

3. Balancing between the right of creditors to collect debts and the principles mentioned here.

4. An effective, usable and efficient model, based on neutral and equal measures, while leaving room for discretion and flexibility to accommodate various, dynamic life circumstances.

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