Debts

A legal person is insolvent if is unable to meet at least two monetary obligations to more than one creditor 30 days past due. While assessing the debtor’s insolvency one financial claim represents all claims which belonged to one creditor 90 days prior to the application for a declaration of bankruptcy.

A natural person is insolvent if is unable to meet at least one monetary obligation 180 days past due. If a financial claim cannot be recovered from the debtor by execution or if the debtor has failed to meet the obligation after receiving a notice, it is presumed that is insolvent.

INDEBTEDNESS

An indebted person is a person, who is obliged to keep accounts under a special regulation, has more than one creditor and the value of his liabilities exceeds the value of his assets. Thus, it can be said that the basic prerequisite for starting a bankruptcy proceeding is particularly the plurality of creditors (a situation where the company has several not-satisfied creditors).

The procedure for filing application for a declaration of bankruptcy itself is also regulated by the Bankruptcy and Restructuring Act, under which the persons who are entitled to file the application for a declaration of bankruptcy are the debtor, the creditor, the liquidator or another person on behalf of the debtor, if this law so provides. However, under the new legislation of 2^nd part of the Bankruptcy and Restructuring Act, the debtor is entitled to file the application for a declaration of bankruptcy for his assets only if he is a legal person. Under the new legislation, the creditor is entitled to file application for a declaration of bankruptcy only against the debtor who is a legal person or a natural person – entrepreneur.

The Act also mentions the obligation to file application for a declaration of bankruptcy for a debtor that is in indebted, within 30 days of becoming aware of it or, when maintaining his professional diligence, may have learned of his indebtedness. The statutory body, or a member of the debtor's statutory body, or the debtor's liquidator and debtor's legal representative, have also such an obligation on behalf of the debtor. Failure to comply with the obligation to file application for a declaration of bankruptcy in due time is sanctioned in the form of a contractual penalty of up to half of the lowest share capital value for a joint-stock company.

Obligation to file application for a declaration of bankruptcy: Do you think you are in the situation described above, but do not know what to do next? We will review your situation, prepare and submit the application for you.

NECESSARY INFORMATION:

• Court fee for the Application for a declaration of bankruptcy for a legal and natural person entrepreneur (advance payment for temporary administrator’s fee and expenses): EUR 1,500.
• Amount of assets required for the declaration of bankruptcy of a legal and natural person entrepreneur: EUR 6,500.
• The amount of advance payment necessary for the declaration of bankruptcy on the property of a natural person, or the procedure of debt discharge by a repayment schedule: EUR 500.
• Under the new legislation, a debtor - natural person does not even have to have the mentioned EUR 500, as he can borrow it from the Legal Aid Centre, as a type of loan.
• Every problem has a solution and with our help you will know how to solve it.

Restructuring, similarly to a bankruptcy, is a special type of procedure. However, contrary to the insolvency proceedings, the purpose of a restructuring is not to monetize all debtor’s assets, but to achieve an 'agreement' between the debtor and his creditors on how to pay the creditors' due debts, all in order to maintain the debtor's business company or at least part thereof.

The basic objective of a restructuring is to restore the business company and to maintain its operation and to ensure that the debtor's debts towards his creditors are satisfied in a higher amount than in a bankruptcy proceeding. The basic prerequisite for a successful restructuring process is a restructuring plan, in which individual conditions for the satisfaction of the debtor's creditors are agreed, along with the measures to be taken by the debtor for the purpose of a successful restructuring.

WHEN IS RESTRUCTURING POSSIBLE?

Restructuring as a specific type of proceeding is possible if the debtor is at risk of insolvency or is insolvent, in which case he entrusts the administrator with preparing a restructuring assessment in which the administrator recommends, or doesn’t recommend the restructuring of the debtor.

Subsequently, in the next part of the restructuring process, when a restructuring plan is submitted for approval, it is necessary that the debtor follows the rules, or measures for successful restructuring, which are stated in the description part of the restructuring plan.

POSITIVE ENDING

The restructuring process is a demanding process whereby the successful planning of the recovery process saves debtor's business and satisfies creditors' claims filed in the restructuring proceedings. A necessary prerequisite for a successful restructuring process is an early assessment of debtor’s economic situation and at the same time a correct assessment of possible insolvency.

Thanks to a successful team of economic and tax advisors, we can evaluate your circumstances in time and provide you with a satisfactory solution to your situation.

BANKRUPTCY OR RESTRUCTURING?

Do you have many liabilities and feel like there is no way out? You can get help from our team of attorneys and bankruptcy administrators who focus on:

• Comprehensive counselling on solving insolvency
• Filing claims in bankruptcy and restructuring proceedings
• Representing debtors and creditors in bankruptcy, restructuring and debt discharge proceedings
• Processing and preparation applications for a declaration of bankruptcy
• Processing and preparation of restructuring assessments and proposals for permitting of restructuring
• Solving personal bankruptcies and debt discharges

BANKRUPTCY:

Bankruptcy is a specific type of proceeding, the main objective of which is to achieve the highest satisfaction of debtor’s creditors, based on the monetization of the assets in bankruptcy estate. The bankruptcy administrator thus investigates debtor’s assets throughout the whole bankruptcy proceeding, ensures the monetization of debtor’s assets and then satisfies creditors' claims filed in the bankruptcy from the proceeds from the sale of the assets.

Even this "infamous" end of a company can be a solution with satisfactory result.

THERE ARE PEOPLE WHO ARE NOT LOOKING FOR SOLUTIONS. BUT YOU ARE THE ONE WHO HAS NOW MADE A STEP INTO THE RIGHT DIRECTION.

Nowadays, the ever-increasing trend of bankruptcy proceedings declared on natural persons is the result of today's time when many natural persons are in debt and after that, many execution proceedings are held against them and they are unable to repay their debts.

I'M INDEBTED. WHAT ARE MY OPTIONS?

If you feel that your debts are growing bigger than your repayment options, you have executions and you don’t know how to proceed further, contact our team of attorneys and bankruptcy administrators, who will gladly describe to you all details regarding possible solutions to your debt discharge, whether by a repayment schedule or a bankruptcy.

WHAT DO WE OFFER YOU?

• Preparation of an application for declaration of bankruptcy of a natural person - entrepreneur by the creditor
• Preparation of an application for declaration of bankruptcy of a legal person by the creditor
• Preparation of an application for declaration of bankruptcy of a legal person from the position of a debtor
• Representing the creditor or the debtor in bankruptcy proceedings, representing the creditor in creditor bodies
• Counselling and solutions in the field of declaration of bankruptcy

DEBT DISCHARGE

Do you have a lot of debts and don’t know what to do about it? Do you wonder how to repay your liabilities and still live a life with dignity? Contact our law office 4JUSTICE and we will help to solve your financial situation. We will provide you with legal consultations in which, based on more than eight years of experience, we will review your option for a bankruptcy, whether through a bankruptcy proceeding or through a new option of debt discharge with a repayment schedule. We are here for you, and we will gladly explain to you the whole process of debt discharge and “tailor” the solution specifically for your debt situation.

WHAT EXACTLY DOES DEBT DISCHARGE MEAN?

Debt discharge is a type of procedure whereby a debtor – a natural person – gets rid of his debts without the creditors’ option to further demand them. The debt discharge thus helps debtors – natural persons to get rid of their debts permanently and start a new and full life without executions.

RETURN TO LIFE WITHOUT FEAR OF DEBT

By such personal bankruptcy, a natural person can achieve debt discharge, which means that he gets rid of all his debts that have not been settled in the bankruptcy proceeding or by a repayment schedule and the executions will be stopped.

In the case of the new legislation, which is in force since March 1, 2017, the debtor has two options for a debt discharge, either through a bankruptcy proceeding or through a repayment schedule. However, not every debt option is appropriate for every debtor.

THERE ARE TWO METHODS

The method of debt discharge by submitting an Application for a Declaration of Bankruptcy is a type alternative for debtors with a low income and low-value assets, while the value of their liabilities generally greatly exceeds the value of their assets.

The method of debt discharge by submitting an Application for Establishing a Repayment Schedule is an alternative, especially for debtors who still have enough assets, certain income, but these assets are usually encumbered with third-party security rights, and who are unable to meet their obligations in a timely or proper manner.

Thus, debt discharge with a repayment schedule is an alternative for debtors who have caught their insolvency on time, and thus have the opportunity to save their assets, since the basic difference between bankruptcy and debt discharge in form of a repayment schedule is that the debtor does not have to lose his entire assets. However, the creditors' satisfaction must not be less than 30% of the claims and must be 10% higher than in a bankruptcy proceeding.

DO I NEED TO HAVE ASSETS TO BE ABLE TO DISCHARGE MY DEBTS?

New legislation also keeps in mind debtors who want to dispose of their debts, but do not even have the minimum value of their assets of EUR 1,659.70 which was required for declaration of bankruptcy under the previous legislation. According to the new legislation, when submitting the Application for a Declaration of Bankruptcy or the Application for Establishing a Repayment Schedule, the debtor does not need to prove the minimum value of his assets.

If you are a natural person, if you have a lot of debts and don’t know how to repay them, the solution for your situation is possible through the personal bankruptcy in the form of an Application for a Declaration of Bankruptcy or an Application for Establishing a Repayment Schedule. We will be happy to help you.