Consumer bankruptcy is an institution of Polish law that seeks to redeem in full or in part the obligations of a natural person not conducting business. Bankruptcy proceedings are regulated in the Act of 28 February 2003 Bankruptcy Law. The regulations contained in the Act allow for the declaration of bankruptcy to a natural person who fulfills such basic conditions:
– has a place of residence in Poland,
– does not run a business,
– does not regulate its obligations for at least 3 months,
– insolvency or an increase in the degree of insolvency arose not from intentional fault or gross negligence.
In bankruptcy proceedings, liabilities of varying nature may be unpaid credit obligations, so-called loans Payments, liabilities to private persons, fees for utilities, rents, telephones, etc .. You can not claim redemption of maintenance obligations, damages, fines and court fees in the bankruptcy proceedings. It is possible, with proper conduct of proceedings, to include in consumer bankruptcy also liabilities originating from previously conducted economic activity, including public law claims such as tax arrears in the tax office or contributions due to the Social Insurance Institution.
Bankruptcy proceedings begin with filing for bankruptcy with the court competent for the debtor’s place of residence. In Poland, departments dealing with consumer bankruptcy have 30 district courts. The application should be submitted with a list of its obligations (list of creditors) together with documents confirming the existence of an obligation (contracts, payment orders, invoices) and their amount, and the due date. The application should also indicate its financial status, i.e. show the source of income and its amount, show valuable movable property or real estate, which we are owners or co-owners. After submitting the application, the court will set the date of the hearing at which the person applying for bankruptcy should appear and submit an explanation. If the judge has no doubts, the consumer bankruptcy is announced at the first hearing. It is also possible to appoint further court sessions.
After the declaration of bankruptcy by the court, the bankruptcy is appointed to the receiver and judge commissioner who are already dealing with the proper bankruptcy proceedings, whose main purpose is to determine the assets of the bankrupt and its possible monetization towards liabilities. If the bankrupt works and its income allows, a repayment plan can be established, which can last up to 3 years. During this period, the person who declares bankruptcy will be obliged to provide the receiver with a fixed amount towards partial satisfaction of the obligations. After the end of the set period, unpaid receivables are canceled. In the event that the bankrupt has no assets and is unable to make payments towards the creditors’ repayment plan, the proceeding can only be concluded by determining the list of creditors and discontinuing these liabilities.
Bankruptcy proceedings are prolonged if the bankrupt owns the property, in particular the property. It is connected with the fact that the trustee takes actions aimed at selling such assets.
After the end of the bankruptcy procedure, there is an entry in the credit information office about the fact that the person has declared consumer bankruptcy.