Category: Bankruptcy

According to data collected by the bureaus, the sum of unpaid liabilities is nearly PLN 43 billion. The number of debtors among Poles has exceeded 2 million. Unfortunately, but all research is not optimistic, because the proportion of nonresponsible “on time” from year to year is increasing. The chance of getting out of debt remains a declaration of consumer bankruptcy.

By the end of 2014, consumer bankruptcy was possible in very sporadic cases. The data provided by the Central Economic Information Center, according to which the number of insolvency proceedings has been reduced to just 60 since 2009, are currently in force. At present, there are provisions that have significantly liberalized the previous requirements of a debtor seeking bankruptcy. As of December 31, 2014, the amendment to the law has come into force, and thus the conditions for bankruptcy have been relaxed and the burden of the debtor has been removed. As of 1 January 2016, further provisions of the Act have been amended, which directly regulate the institution of bankruptcy of a natural person not conducting business activity. The number of positively processed applications increased from month to month in order to achieve 331 declared consumer bankruptcies in December.

Consumer bankruptcy is a separate bankruptcy proceeding intended for consumers, that is, people who do not carry out business activities, which is intended to be indebted. In order for the consumer to be able to effectively redress his obligations, two essential conditions must be fulfilled:

  • must be insolvent;
  • Insolvency could not have arisen because of its wrongful conduct or gross negligence.

In addition to the above, the so-called. Relative negative pronouncements, which may result in the dismissal of a consumer bankruptcy application, but not necessarily if the so-called ” clauses of reason.

Essential is the state of insolvency. The definition of insolvency can be found in Art. Article 11 of the Bankruptcy Law, although the debtor is a natural person, 1 and 1a of the aforementioned article – “the debtor is insolvent if he has lost his ability to perform his / her liabilty” and “it is presumed that the debtor has lost his / her ability to pay his /

Another issue examined by the court is the issue of guilt. The court may dismiss the application if the debtor has led to his insolvency or significantly increased the degree of insolvency intentionally. Alleged negligence means not upholding the basic principles of proper conduct in a particular situation, which are obvious to every prudent man. It is important, however, to distinguish between gross negligence and negligence, which does not constitute a condition for rejecting the application.

Among the liabilities that may be subject to bankruptcy are all civil law liabilities (eg mortgage) and public law (eg tax levied). The exception is:

  • maintenance;
  • receivables hidden by the debtor in connection with bankruptcy;
  • fines and other penalties determined by the criminal court;
  • compensation for personal injury and those resulting from a crime or misdemeanor.

Applications for bankruptcy of consumers should be directed to the district court (business department), which is responsible for the main center of the debtor’s main business. For a non-business person, this is usually the place of residence. If the debtor does not have such a place on the territory of Poland, the court in the debtor’s property is competent.

As a rule, the whole procedure can take from several months to a dozen or so. Since the application has been filed, the court has two months to review it. If the court finds it appropriate to set up a creditors’ repayment plan, depending on how long it will be set (for a maximum of 36 months), the entire procedure will be extended.

On the day when the court announces the bankruptcy proceeding, a bankruptcy estate is created & bankruptcy attorney in San Diego included, which consists of the entire property of the debtor. The amount of bankruptcy is ultimately used to satisfy the creditors, including the assets held on the date of bankruptcy, and also acquired during the relevant insolvency proceedings. Its composition includes eg: movable property, real estate, shares in a limited liability company. On the other hand, the bankruptcy estate can not be counted, for example, the right to maintenance, the right to redress for personal injury, and therefore personal rights.

Among the benefits associated with bankruptcy filing include:

  • the reliability of redundancy as a result of the redemption of outstanding debts incurred in the course of bankruptcy proceedings;
  • The possibility of repaying part of the debt in installments if a repayment plan is agreed. It should also be added that as a result of the repayment plan it is not possible to pay off the entire debt, but only to a small part of it. It is more about the educational function of the repayment plan than the debt recovery function to recover the entire debt;
  • Suspension of debt collection proceedings conducted by creditors, court proceedings for payment and enforcement proceedings. The bodies participating in insolvency proceedings are the court and the trustee;
  • certainty that debt will not increase during bankruptcy. Interest is accrued;
  • entitlement to receive a monetary amount equal to the average rent for a period of 12 to 24 months (in the case of sale of a flat or house by the receiver);
  • possibility of deleting personal data from registers maintained by business information offices. The register court ex office removes data from the register of insolvent debtors maintained by the National Court Register.
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Restructuring as an institution of banking law was introduced into the legal order on November 27, 2015 (it became under the Act of 25 September 2015 amending the Banking Act and certain other acts). The purpose of this amendment was to adjust the system of the right to the ruling of the Constitutional Tribunal of April 14, 2015 (file No. 45/12), as the amendment to the law on the issue of debtors, which is unconstitutional in the Court’s view, The bank’s execution title (BTE). However, the most important is the introduction by the legislator of the provisions contained in Art. 75c of the Banking Law  regulating the process of debt restructuring of borrowers and borrowers. In the rest of this article I use the term “borrower”

The Procedure Is As Follows:

  • If the borrower delays repayment of the loan, the bank invites him / her to make a repayment by setting a time limit of not less than 14 working days. (Article 75c (1) of the Bank. The bank can not immediately terminate the loan agreement or bring a legal action against the borrower. Of course, the bank has no right to issue a BTE, which simplifies the investigation of claims by omitting the course of the court proceedings.
  • Importantly, the bank is obliged to inform the borrower of the possibility of applying for debt restructuring in the call for payment. A restructuring request may be submitted within 14 working days of the date of receipt of the tender offer (Article 75c (2) of the Banking Act). In the letter to the bank should be specified their own restructuring proposals, eg reduction of the installment with the extension of the period of credit, the introduction of the so-called. holiday loans or remission of interest.

  • Upon submission of the application by the borrower, the bank will assess the financial and economic situation of the debtor. It is impossible to hide that this is a crucial moment for the whole procedure. If this analysis would be beneficial for the borrower, the bank should be able to restructure its debt by changing the terms and conditions of the loan specified in the agreement. In the event of a negative opinion on the debtor’s application, the bank will not agree to the restructuring and the whole procedure will fail. The legislator explicitly states that the restructuring is carried out on the terms agreed between the bank and the borrower (Article 75c (4) Pr.Bank), so the consent of both parties to the loan agreement is required to revise its provisions.
  • However, the legislator made sure that the bank’s analysis was not superficial (and that it would take place at all!), And that the debtor was not dismissed with a bank statement without any explanation. In light of Art. Article 75c 5 of the cited law, in case of rejection of the borrower’s request for debt restructuring, the bank shall provide the debtor with detailed explanations as to the reason for rejecting the request for restructuring. The bank’s position must be filed in writing and presented to the debtor without undue delay.

The road described above has its own advantages. First: it costs nothing (except time and energy to formulate the proposal). Secondly, the road is of a formalized nature, and the matter is being dispersed between the parties outside the court. Thirdly, if the debtor’s application is evaluated positively, the bank will be able (or rather should) change the terms of the agreement, which will, to a certain extent, improve the situation of the borrower only at the Blc bankruptucy law center. Lastly, the mere existence of this procedure prevents the bank from hastily terminating loan agreements and, at least, will allow a delay in court proceedings to which the debtor can better prepare. If the bank in the request for payment had “forgot” about instructing its client about the possibility of applying for a restructuring, the court in the case of the court should raise a complaint in this regard. Interestingly,

The disadvantages of restructuring under the principles of banking law are also perceptible. In particular, debtors will complain that they have to work hard to formulate a proposal, and that the all-powerful bank will decide for themselves. Finally, there is no element of arbitrary redemption of liabilities, which is associated with consumer bankruptcy. It is rather expected that banks will relinquish their liabilities (even in part), they will more often agree to reduce the installments by extending the crediting period or increasing the collateral. Undoubtedly, restructuring, compared to bankruptcy, will be less attractive for over-indebted consumers

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