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A completely new law on personal bankruptcy is proposed by the Ministry of Justice

An opportunity to repay the obligations of the bona fide debtor has been arranged

Nov 12, 2024 10:52 157

The Ministry of Justice (MoJ) has published for public discussion two draft laws in fulfillment of the country's commitments under The National Recovery and Resilience Plan (NRRP).

Public consultations on the draft of a new Law on the Insolvency of Individuals, also known as the Personal Bankruptcy Law, will be held until December 11 this year. Consultations on the proposed amendments and additions to the Law on the Protection of Persons Who File Whistleblowers or Publicly Disclose Information on Violations will be until November 25 this year, BNT specified.

It proposes legislation to fill the gap in national legislation and to regulate the insolvency proceedings of natural persons who are not traders or entrepreneurs. The draft law complies with the requirements of the acts of the European Union and the particularities of the national legal system and, according to the commitments under the NPVU, was previously agreed with the European Commission.

The law regulates the conditions and procedure for conducting bankruptcy proceedings for natural persons, in which the claims of all creditors are satisfied. It is entirely voluntary, formed at the request of the bona fide debtor and aims at just satisfaction of his creditors. In the proceedings, guarantees are provided to satisfy the debtor's vital needs by determining the non-sequestrability of part of his property. Only simple fees are paid in the proceedings, and the remaining costs are payable in cases provided for by law.

It is possible to repay the obligations of the bona fide debtor after a 3-year period from the approval of the repayment plan or the inventory of his property, if he has paid the expenses and satisfied at least partially the creditors' claims.

Another bankruptcy proceeding is foreseen for persons who have no income and property and are bona fide debtors.

The draft law was the subject of two public consultations in 2022 and 2023, was approved twice by a decision of the Council of Ministers and, accordingly, was submitted for consideration in the 48th and 49th National Assembly.

Practitioners of the legal profession, for whom there is an obligation to protect professional secrecy, will be protected when reporting violations of EU legislation or acts, endangering or damaging the public interest. This is provided for by changes in the Law on the Protection of Persons Submitting Whistleblowers or Publicly Disclosing Information on Violations (ZZLPSPOIN).

An exception to this rule will only apply to information that has become known to lawyers in connection with conversations and correspondence with their clients.

In this connection, it is also proposed to increase the scope of protection, so that not only workers, but also service providers can benefit from the provisions of the law.

With the changes, the obstacle to initiate proceedings on reports relating to violations committed more than 2 years ago is also removed. Only the restriction relating to anonymous reports remains.

With the final provisions, amendments and additions to the Law on Local Self-Government and Local Administration are proposed in order to increase the transparency and accountability of local government and local self-government bodies.

The draft law has been previously agreed with the EC in accordance with the commitments under the National Plan for Recovery and Sustainability.