Introduction
All seems to suggests, that this time works concerning an introduction in polish law order a new institution such as consumer insolvency, want be in vain. Such a notion is justified by a wide support to the governmental project of the Act amending a Bankruptcy and Reorganisation Law given among others by the Supreme Court and Polish Confederation of Private Employers Lewiatan.
Who could be declared an insolvent?
As the law now stands only insolvent entrepreneurs may take advantage from the benefits of declaring a bankruptcy. After an amendment it will be also natural persons who do not pursue an economic activity and who became insolvent as a result of exceptional and independent circumstances. As it is often underlined, declaration of insolvency should make easy overcoming the financial difficulties, in which someone got without his fault, and thanks to which he shall not be excluded from society. Under no circumstances such an institution should be aimed at helping to avoid liability by reckless consumers or frauds. The matter of declaring insolvency each time shall be determined by the court. Moreover an application for declaration of insolvency may be submitted not often than once for 10 years.
How an insolvency shall be declared?
A petition for declaration of insolvency shall be dismissed, if an insolvency was not a result of exceptional and objective reasons, especially when a debtor undertook a liability while being already insolvent or employment relation was terminated as a result of reasons for which insolvent is responsible or by his consent. After a consumer had submitted an application for insolvency declaration he is obligated to indicate and hand over all of his assets to a bankruptcy trustee and a court shall subsequently prepare a plan of repayment of debtors, indicating among others the scope and period of repayment of debts. The amendment provides spreading of this period for 5 years, however in a particularly justified cases it may be extended.
The status of an insolvent consumer
The possibility of declaring a consumer insolvent is his privilege and thus additional duties were imposed on him and the eventual not complying with them may result in discontinuance of the proceedings. The bankruptcy estate shall include all insolvent consumer’s assets together with a real estate in which consumer lives alone or with a family. The project provides for however that a debtor should have essential living conditions, owing to which he could engage in work and debts repayment. That is why a debtor, from the money obtained from sale of flat or house, shall receive the amount equal to a twelve months rate for a housing apartment lease. During the performance of the distribution plan a debtor shall not be able to perform acts exceeding the scope of regular administration, as well as an instalment purchase and purchase with deferred payment term. Moreover the provisions provide submitting to a court an annual report concerning the performance of the repayment plan.
Creditors status
The projected model of consumer insolvency provides not only protection of debtors’ interests but also his creditors. Therefore, one of the basics assumption is that the creditors were satisfied at the highest possible level. Although the insolvency proceedings shall result in spreading the repayment in time into instalments, but thereby it increases the factual repayment. A court may also set the repayment conditions irrespectively of bankrupt’s petition.
Simplicity and costs
At the conclusion it should be underlined that a key to a success is that a declaration of bankruptcy were uncomplicated and cheap. It is difficult to expect that somebody shall take advantage of the institution, which he does not understand or he can not simply afford. Thereby, proposing only one mode of proceeding, lowering the court fee for filing a petition for declaring insolvency and enabling conducting of the proceedings by an insolvent himself should be positively assessed.
