Amendments in the bankruptcy law

added: 15.12.2014
By the act of August 29th, 2014 (Official Journal from 2014, position 1306) on amending the Act - Bankruptcy and Reorganization Law, the Act on National Court Register and the Act on court fees in civil proceedings, the Parliament adopted the amendment in the regulations of the act on Bankruptcy and Reorganization Law in the scope referring to consumers’ bankruptcy (articles 4911 - 49112 and new articles 49113 – 49123).
Amendments in the bankruptcy law

The new regulation entered into force as of December 31st, 2014. The amending regulation is intended to increase consumers’ interests regarding the institution of consumers bankruptcy. The aim of the new regulations is to mitigate the restrictive requirements connected with declaring the bankruptcy in the situation of excessive dept.

The main amendments shall concern:

1) decreasing the level of a court fee paid for the application to declare the bankruptcy from present court fee in the amount of 200PLN to 30PLN;

2) amendment in the requirements to initiate bankruptcy proceedings (article 4914 of the Act - the Bankruptcy and Reorganization Law) - the project assumes that the consumer who became insolvent without his fault or not as a result of his gross negligence can file an application to declare bankruptcy;

3) decreasing the costs of conducted bankruptcy proceedings (syndic salary), and also establishing an advanced payment which shall be paid out temporarily from the Treasury to cover expenses in the legal proceedings in case of inability to be covered by bankrupts’ assets;

4) shortening the period in which the bankrupt consumer shall be obliged to conclude the repayments for the benefit of the creditors from 5 to 3 years. After performing such a plan of repayments the court shall redeem the rest of consumer’s obligations. In particular cases, when the life situation of the bankrupt indicates so, the court can even decide to redeem the rest of consumer’s obligations without determining the plan (schedule) of repayments;

5) implementing possibility to initiate the legal proceedings in case when the bankruptcy consumer has only one creditor (currently possible only when the debtor has at least two creditors);

6) simplifying the formal requirements for the application to declare the bankruptcy;

7) resigning from announcing in the press and to transfer all of the announcements which were made in the legal proceeding to Central Registration of Bankruptcy;

8) implementing the new regulations related to discontinuance of legal proceedings ( art. 4914) which relies on:

  • optional abandonment of legal proceedings - the obligation to hear the bankrupt and the syndic;
  • possibility to abandon the legal proceedings in the situation where bankrupt’s behavior that ab initio exclude the possibility of announcing consumers bankruptcy was disclosed after the bankruptcy announcement;
  • possibility to abandon the legal proceedings upon the bankrupt’s application (accordingly for the married couple’s unanimous application if the legal cases were joined to be jointly considered);
  • exclusion of possibility to abandon the legal proceedings due to lack of sufficient assets allowing to cover all of the proceedings’ costs or upon the debtors’ unanimous application;
  • alleviation of the prohibition of another process of freeing of debts in the period of 10 years – in place of complete prohibition, the Act will implement optional negative requirement to declare the bankruptcy within the time of 10 years from the previous redemption of bankrupt’s obligations, performed as a result of exercising such opportunity in bankruptcy proceedings, unless the insolvency occurred despite bankrupt’s due care.