Consumer bankruptcy is a special court procedure that involves debt relief for individuals who are no longer able to manage their repayments.
Consumer bankruptcy is a special court procedure that involves debt relief for individuals who are no longer able to manage their repayments.
This procedure makes it much easier to deal with debts when you do not have the money to repay your mortgage, for example. What criteria must be met to apply for consumer bankruptcy?
What is consumer bankruptcy?
This procedure is intended exclusively for private individuals who do not run any business. Entrepreneurs are not eligible for it. Consumer bankruptcy is only available to insolvent individuals, i.e. those who have been unable to meet their financial obligations for at least three months. The main purpose of the proceedings is to satisfy creditors, e.g. from the debtor’s assets, and to write off part or all of the debts. It is assumed that a consumer becomes insolvent when their monthly income is too low to cover their living expenses and debt repayments. It is important to remember that the regulations are subject to change, so it is worth keeping track of amendments that affect consumer bankruptcy.
How to declare consumer bankruptcy?
First of all, the declaration of bankruptcy of a natural person takes place exclusively in court. Therefore, in order to be able to take advantage of this solution, you need the help of a solicitor and to bring the case to court. The application may be submitted not only by the debtor, but also by their creditor. The most important thing is to thoroughly justify in court that the debtor has no real possibility of repaying their outstanding liabilities. Only then will the case be considered positively. Nevertheless, the court may dismiss the application or discontinue the proceedings for various reasons. In addition, if, in the course of the proceedings, the court finds that the debtor’s deliberate actions were the cause of the insolvency, it may refuse to establish a repayment plan for creditors, which means that the consumer will not obtain debt relief. In order to declare consumer bankruptcy, an application must be submitted to the court and a fee of PLN 30 must be paid. It is worth seeking the assistance of a law firm in order to complete the documentation and prepare the bankruptcy petition with professional help.
It should be remembered that consumer bankruptcy does not always result in complete debt forgiveness. It is often a complicated and time-consuming process, so it is worth being patient and preparing for this situation by seeking the advice of a restructuring advisor.
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