Floating Charges on Assets of Individuals

Abstract

The Security Interests Law, 1967, created a revolutionary change in Israel's law of security interests inasmuch as it replaced the previous obsolete regime with a modern one. Notwithstanding, it refrained from adopting a clear position on the question of whether a non-corporate debtor may create a security interest over his assets by means of a floating charge. Such a charge, which according to Israeli law may be given by companies and cooperative societies, applies to both the current property of the debtor and any property which he may acquire in the future. The uniqueness of the floating charge, however, is not merely insofar as it extends to the future property of the debtor. Unless otherwise provided for, the floating charge allows the debtor to continue to execute transactions with his assets, such as their sale or mortgage, whereby the grantee of the rights by virtue of such transactions is not subject to the floating charge.