Declaring personal bankruptcy is not an easy process. From intent to bankruptcy to final debt relief, it can take several months because of very high interest. It is therefore advisable to speed up this time and to know the basic conditions under which personal bankruptcy can restore the state of your finances.

Under the current legislation, the process of commencing debt relief for high interest is considerably limited. Consultations on this issue are booked a few months in advance, but your unpleasant financial situation can be addressed immediately.

You can claim debt relief and debt when you are insolvent, so you cannot pay your obligations to multiple creditors. This is often a common phenomenon, since it is not always easy and automatic to find a permanent employment relationship and the availability of financial loans has often entailed extending people beyond a disproportionate threshold, where even their own assets are no longer able to cover debts.

Forms of debt relief

You can get rid of your debts in two ways - bankruptcy or repayment schedule. The difference between these forms is that, in bankruptcy, you provide all your assets to pay creditors. In the case of debt repayment in the form of a repayment schedule, you have to pay part of your debts in installments, while retaining your assets.

Declaration of personal bankruptcy

The basic condition for the declaration of personal bankruptcy is at least one execution procedure against the debtor or other enforcement procedure. The fulfillment of this condition is proved by an extract from the register of execution or confirmation from the competent district court. It is not possible to apply for debt relief without ongoing execution. You can also file a personal bankruptcy petition even if you have no assets, you have no property. Debt relief is also available to you, and the court will set you aside by declaring bankruptcy. The proposal must be accompanied by appropriate documents to prove your property situation and the state of debt.

If you meet the above condition that you have at least one enforcement or other enforcement proceedings against you, the court will file a personal bankruptcy. The further course depends on the chosen form of debt relief, either by bankruptcy or payment schedule.

Bankruptcy

In the case of debt relief by bankruptcy, the court, after examining the petition, declares bankruptcy of the debtor's assets and appoints the insolvency administrator. The latter shall invite the debtor to cooperate to list all the property owned by the debtor. These assets are subsequently monetized in bankruptcy and the proceeds of the monetization are used to cover the costs of bankruptcy and creditors' claims.

The situation is different when debt is paid off in the form of a repayment schedule. The court will consider the application and, if the conditions are met, provide protection to the debtor against the creditors and appoint a trustee. Protection against creditors consists in postponing all executions where the debt may be affected by debt relief. In this procedure, the trustee no longer monetizes the assets, but assesses the financial situation of the debtor as to whether it will be able to secure its basic necessities from its income as well as repay part of the receivables, not less than 30% of the receivable. If the trustee considers that the debtor is able to meet part of their claims with creditors, he shall draw up a repayment schedule. If the trustee, by its assessment, concludes that it is not possible to draw up a repayment schedule, it will recommend the debtor to file a debt relief by bankruptcy.

Debt relief