Arrangement for Payment of Child Support Debt - Interest on Arrears

Case No. AR 874-03-15 concerned an appeal against a decision of the Execution Office Registrar, based on the debtor’s claim of “I have paid.” The legal question raised was: When the court orders the installment payment of past-due child support debt (a debt accumulated due to failure to pay child support obligations in full and on time), does the debt also bear arrears interest, as defined in Section 5(b) of the Interest and Indexation Law?

Hon. Judge Felix ruled that arrears interest should not be imposed on child support debt, unlike ordinary debts, for various reasons. The rationale behind the ruling was to encourage the child support debtor whose repayment has been spread out in installments. In his words:

"However, I believe that precisely in light of this position, the opposite result should be reached: where the repayment of past-due child support is ordered in installments by a court judgment, arrears interest should not be added to the principal debt."

The Court further noted that the child support recipient is not harmed by the absence of arrears interest during the installment period. This is because even during the installment payments, the outstanding balance of past-due child support that has not yet been repaid accrues “regular” interest, placing the recipient in the same financial position as if the child support obligations had been paid on time originally.

The ruling was based on a value-oriented approach toward the debtor, without detracting from the rights of the recipient, as follows:

In Civil Appeal 4905/98, Professor Yosef Gamzu v. Naama Yeshayahu, President Aharon Barak discussed the purposes of the Execution Law, 1967, noting that one purpose is “to assist the creditor in collecting his debt quickly and efficiently”; and the second purpose is “to protect debtors who, due to their financial situation, cannot meet payment of the adjudicated debt.”

President Barak ruled there that “the purpose underlying Section 69(e) of the law was to assist the spouse against whom child support debt had accumulated and was not paid on time. It is therefore appropriate so as to fulfill the purpose underlying the provision to apply Section 69(e) both to cases where the judgment set installments for child support payments and to cases where the judgment did not set installments.”

He further held that “Alongside the specific purpose of preventing undue hardship to the debtor, lies the general purpose of protecting and preserving the debtor’s human dignity and liberty. This purpose is enshrined in the Basic Law: Human Dignity and Liberty.”

Proper and fair balancing requires broad perspective, values, and consideration of the overall circumstances, with careful attention to each detail of the case, while maintaining mutual respect and fairness between the parties and interests involved.