7 October 2023
On 7 October 2023 the Swords of Iron war broke out. About a week later, on 15 October 2023, the Bank of Israel published a relief framework that was adopted by the banks. Under the framework, any customer could ask to defer loan and mortgage payments for three months, without fees. For customers directly harmed by the war, the deferral was also set without interest. Requests could be submitted until 31 December 2023.
At the time, the vehicle owner was a customer of Mizrahi Tefahot Bank. The car loan had been granted in 2021 by Bank Igud, through Igud Leasing. Bank Igud was merged into Mizrahi Tefahot Bank, and the leasing company changed its name to "Mizrahi Tefahot Leasing Ltd.", a subsidiary of the bank. The monthly payments were collected from the vehicle owner's current account at Mizrahi Tefahot Bank. Therefore, in this article, the entity referred to as "the bank" is the Mizrahi Tefahot group.
According to the bank's own letter, the loan balance stood at approximately NIS 151,668.
The request: defer, or approve a sale
According to the vehicle owner's account in his affidavit, in October 2023 he contacted his personal banker asking to defer the payments in accordance with the Bank of Israel's guidelines. If a deferral was not possible, he asked for written approval to sell the car and repay the loan. Written approval was needed because the loan agreement prohibits selling the pledged vehicle "without the prior written consent of the company".
In the bank's internal inquiry log, which was provided to the vehicle owner only in 2026 in response to an access request under the Privacy Protection Law, the following entry was recorded on 9 November 2023:
"called customer back there is a large number of requests because of the situation and so delayed"
On that very same day, 9 November 2023, the bank collected the full monthly payment from his account: NIS 2,713.42. The same happened on 10 October (NIS 2,720.22) and on 10 December 2023 (NIS 2,706.60). Not a single deferral was recorded in the loan ledger.
The final answer the vehicle owner received, according to his affidavit: "Suddenly I was told on behalf of Mizrahi-Tefahot Bank that no loan at all is registered in my name at the bank, and therefore my request to defer the payments cannot be carried out". According to his account, the answer was given in internal correspondence with the bank. The bank did not provide this correspondence, not even in response to the access request.
On 11 December 2023 the bank's log recorded: "the credit card limit was reduced to 1 nis".
The bank knew, the bank checked
On 7 November 2023 the vehicle owner left Israel. He returned only on 12 July 2025. The dates appear in an official certificate of the Population and Immigration Authority.
The bank made inquiries about the vehicle owner. In its response to the access request of 4 February 2026, the bank confirmed that it holds an "economic investigation" and a "background check report", and refused to provide them. According to the vehicle owner, the inquiry was carried out as early as December 2023, and it notes that he is staying outside Israel.
The first warning: NIS 5,349, to an address that does not exist
On 28 February 2024 a "warning before taking proceedings" letter was produced. According to it, the arrears stood at NIS 5,349.59, and if they were not paid within 21 days, "we will be entitled to call the loan in the account for immediate repayment". The address block of the letter has no street name: only a house number and a locality. It is an address that does not exist. No proof of mailing was attached to the response to the access request.
On 1 April 2024 the leasing company's records noted: "no response early repayment executed". A balance of NIS 153,026.86 was transferred "for legal handling".
The customer asks to pay. The answer: "The amount of the debt"
On 14 April 2024 the vehicle owner wrote to the bank: "How can I find out details about my car, debts and the loan balance." On 17 April 2024 he wrote again:
"I am not in the country and I have no intention of coming back in the near future. I want to pay off the loan and sell the car myself."
And in the same email: "At my branch, Ramat HaSharon, they couldn't locate where the loan is."
Neither email was answered by the bank. Instead of a reply, he was contacted by the bank's law firm. On 2 May 2024 the vehicle owner wrote to the firm's representative on WhatsApp: "I asked the bank close to 10 times to send me details of the loan because I want to sell the car. They didnt send anything and at Mizrahi bank they said they dont have a car loan."
The answer he received, on 9 May 2024, was a single line: "The amount of the debt as of today is NIS 153,263.10 (not final)". No breakdown of how the amount was arrived at, no notice of whether and when the loan had been called for repayment, and no approval to sell the car.
While he was abroad: two files
On 24 June 2024, while the vehicle owner was abroad and asking to pay, a "vehicle pledge" file was opened against him at the Execution Office (Hotzaa LaPoal) in Haifa. In an affidavit filed by the bank for the ex parte appointment of a receiver, it was claimed that there was a risk the vehicle would be made to disappear, and that therefore no warning was needed before calling the debt for immediate repayment. In early July 2024 a receiver was appointed over the vehicle.
On 10 December 2024 the law firm contacted the vehicle owner on WhatsApp. He replied: "Hi. I'm abroad since November 2023. What is the matter at your office?"
Five days later, on 15 December 2024, another file was opened against him, this time at the Netanya office, of the "promissory notes" type, for NIS 178,075.22.
On 22 December 2024 it was reported to the file that a process server "met the debtor", who received the documents and "refused to sign". The Execution Office registrar later determined, on the basis of the record of entries and exits, that on that date "the debtor was outside the borders of State Israel".
At the end of January 2025, 31 actions were recorded in the file, which according to the vehicle owner are attachments with third parties. On 7 July 2025 five restrictions were imposed on him: a restriction on leaving the country, a restriction on using a charge card, a restriction on obtaining or holding a passport, a restriction as a debtor in a corporation, and "special restricted customer".
12 July 2025: the return
Five days after the decision, on 12 July 2025, the vehicle owner returned to Israel. There he discovered that he was barred from leaving the country, that his accounts were attached, that the car was in the hands of a receiver, and that he was prohibited from holding a credit card.
What the law requires of a bank
The duty of good faith. The Contracts Law provides that an obligation arising from a contract must be performed "in a customary manner and in good faith", and that the same applies to exercising a right arising from a contract (section 39). The courts have held on more than one occasion that a bank bears a heightened duty, because the relationship between it and its customer is based on trust, and because the bank is the party that holds the information and the power.
The contract itself. Section 3.1 of the loan agreement provides: "The company shall not call the loan, or any part of it, for early repayment on its own initiative without the borrower having been given a written warning thereof in accordance with the provisions of the law (insofar as a duty to deliver a warning applies in the circumstances of the matter according to the law)". The only warning found was sent to an address without a street name.
Refraining from proceedings. A customer who writes to the bank "I want to pay off the loan and sell the car" is not a customer who is hiding an asset. The question the article poses: should a bank that receives such a request, and knows that the customer is abroad, cooperate with the sale and the repayment, or open ex parte enforcement proceedings?
The Bank of Israel framework. The vehicle owner requested a deferral during the framework period. No deferral was recorded in the ledger, and the payments were collected as usual.
What next
In the next articles in this section: what happened after the return, how the debt grew, and where Mizrahi Tefahot Bank was in October 2023.
About this article: The article presents the vehicle owner's account and documents from the file: the inquiry log and the loan ledger provided by the bank in response to an access request, the warning letter, correspondence, the Population Authority certificate, decisions of the Execution Office registrars, and affidavits. Quotations from affidavits are the declarant's account. Identifying details have been omitted. The article was created with the assistance of artificial intelligence on the basis of the documents, and was reviewed and approved by the vehicle owner. This English version is an AI-assisted translation of the original Hebrew article; the quotations were translated from Hebrew. The Hebrew version is the controlling text.