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Pay Up,
Or Go To Prison

In Israel, debtors still go to jail in a system leftover
from pre-World War I Turkish legal codes.

LARRY DERFNER ISRAEL CORRESPONDENT

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I

n the two years period July
1988-July 1990, 2,385 Is-
raelis were imprisoned for
not paying their debts, ac-
cording to the Prison Authori-
ty's records. Fifteen of these
debtors sat in prison for more
than a year. Some 339 were in
for three months to a year. A
slight majority of the debtors
served the minimum time —
one to 21 days.
Then things got worse. In
1990 the Knesset passed a law
that was supposed to cut down
the number of debtors behind
bars, but, because of the va-
garies of Israel's bankruptcy
rules, it ended up doing the op-
posite.
From January 1991-Febru-
ary 1992, according to Justice
Minister David Liba'i, an in-
credible 253,711 arrest war-
rants for unpaid debts were
issued. Police carried out 17,789
of them, but some of these pur-
sued suspects managed to stay
out of jail by proving — before
the police arrived — that they
had already paid the debts in
question.
"They say that Israel is the
only democracy in the Middle
East, but it's also the only
democracy in the world that
sends debtors to jail," said at-
torney Eyal Simchoni, who rep-
resents theorganization Perach
(a Hebrew abbreviation for
"Bankrupts and Debtors") in its
attempt to get the Supreme
Court to outlaw the practice.
In the last two years, there
has been a rash of suicides by
people who could not pay their
debts, and who faced a life of
going in and out of jail because
of it. Earlier this month,Ya'acov
Hess jumped to his death from
his eighth-floor Nahariya-a-
partment because he owed hun-
dreds of thousands of dollars on
his family business, said Shmu-
lik Elbaz, chairman of Perach.
Two years ago, Mr. Hess's
brother and partner, Yehuda,
killed himself by jumping out of
the same window.
"We spend about half the
time with the people who come
to us trying to convince them
not to commit suicide, that life
is still worth living," said Mr.
Elbaz, whose organization coun-
sels heavy debtors on how to get
out from under. In its two years
of existence, Perach has taken

on more than 25,000 clients.
People go to jail for the most
measly debts. Ya'acov Adir, an
81-year-old disabled Army vet-
eran, spent six days in jail be-
cause he owed about $55.
Shimon Yadzi of Ashdod did 21
days because his unpaid 5-
shekel account with the Value-
Added Tax Administration had
grown, with fines and interest,
to 8,742 shekels.
On one or two occasions, chil-
dren of imprisoned debtors have
even been put in jail because
the police could not find anyone
to take care of them.
Virtually everyone is ap-
palled at the system — the gov-
ernment, the opposition, the
judges, the media, the Justice
Ministry. "It is grievous in the
extreme that, without defining
(their indebtedness) as a crime,
people are thrown in jail, and a

There have been
suicides by people
who could not pay
their debts.

certain percentage of them sit
there for days because they are
unable to pay off their debts.
This is not right," said Justice
Minister Liba'i.
"The phenomenon of impris-
oning debtors has turned into a
national epidemic, and un-
doubtedly needs an immediate
solution," said Labor Knesset
Member Rafi Elul, chairman of
the multi-party Social Caucus.
Mr. Liba'i and Mr. Elul are
preparing a new law that would
supersede the regrettable 1990
statute. Their aim is that the
new law, if it passes the Knes-
set, would allow the imprison-
ment only of people who can
afford to pay their debts but
don't, while preventing the im-
prisonment of honest people
whose debts have grown out of
their control.
Mr. Simchoni believes that
no matter what the Knesset
does, the Supreme Court will
make it illegal to put debtors in
jail.
Still, it's taken Israel quite a
long time to reach this level of
social consciousness. The sys-
tem of debtor's prison existed
here under the pre-World War
I Turkish Mandate, which