Growing loans, borrowings, unpaid bills or debts left after closing a business can lead to a situation in which repaying obligations on time becomes impossible.

In such a case, one of the possible solutions is consumer bankruptcy. The proceedings make it possible to put the situation of an insolvent person in order, settle their assets and liabilities and, in appropriate cases, lead to the cancellation of some of the unpaid debts.

Our firm helps at every stage – from analysing the debt and preparing the petition, through the proceedings involving the trustee, to the repayment plan and the conclusion of the case.

What is consumer bankruptcy?

Consumer bankruptcy is intended primarily for individuals who do not run a business and have become insolvent.

Its purpose is to put the debt in order and allow the debtor to be relieved of debt to the extent provided for by law.

However, declaring bankruptcy does not mean that all debts are automatically cancelled. After bankruptcy is declared, the trustee analyses the debtor’s financial situation, and at a later stage the court may set a plan for repaying creditors.

How we can help

Our help may include, among other things:

• analysing the debt and financial situation,

• assessing whether bankruptcy can be declared,

• preparing the list of creditors,

• drafting the consumer bankruptcy petition,

• collecting the required documents,

• representation in the proceedings,

• support in dealing with the trustee,

• matters concerning the repayment plan,

• analysing the possibility of debt cancellation.

When can you declare consumer bankruptcy?

The basic condition is insolvency, i.e. a situation in which the debtor has lost the ability to pay their due monetary obligations.

The causes may vary – job loss, illness, excessive debt, loans, family obligations or debts incurred during a previous business.

However, the amount of debt alone does not determine whether bankruptcy will be the best solution. That is why we analyse each case individually.

What happens after bankruptcy is declared?

After bankruptcy is declared, the court appoints a trustee.

The trustee establishes the debtor’s assets, analyses the claims and – if there are assets that can be sold – liquidates them.

Enforcement proceedings concerning assets included in the bankruptcy estate are no longer conducted under the previous rules.

Can you declare bankruptcy without any assets?

Yes. Not having a flat, a car or savings does not rule out consumer bankruptcy.

Whether proceedings can be conducted depends primarily on insolvency, not on whether the debtor has valuable assets.

If, however, they own a flat or house, they must expect that the property may become part of the bankruptcy estate and be sold.

Creditor repayment plan

After the steps concerning the assets have been completed, the court may set a creditor repayment plan.

When setting it, the court takes into account, among other things, the debtor’s earning capacity, living costs, family situation and the amount of liabilities.

In certain cases, it is also possible to cancel debts without setting a repayment plan if the debtor’s situation indicates a permanent inability to make any repayments.

Which debts can be cancelled?

Consumer bankruptcy may cover, among other things:

• bank loans,

• loans and payday loans,

• credit card debt,

• unpaid bills,

• some debts related to a previous business.

However, not all obligations can be cancelled. This applies, among other things, to maintenance (alimony) and certain obligations arising from court rulings.

That is why, before filing the petition, we analyse not only the amount of the debt but also its nature.

Debts from a former business

A former entrepreneur may, in certain cases, use consumer bankruptcy even if part of their debt arose while running the business.

Such cases often require a more detailed analysis of the history of the debt and when the financial problems began.

Legal assistance in consumer bankruptcy

First, we analyse the client’s financial situation and check whether consumer bankruptcy is the right solution.

If so, we help prepare the petition and documentation and guide you through the successive stages of the proceedings.

Our aim is not only to obtain a decision declaring bankruptcy, but to genuinely put the client’s financial situation in order and – where the law allows – relieve them of debt.