On January 1 2018, came into force the Law no. 151/2015, having as purpose the establishment of a collective procedure for the recovery of the financial situation of the debtor natural person, of good faith, for coverage to the greatest extend of his liabilities and the discharge of his debts, under the conditions issued by the law.
Who does it apply to?
The provision of this law applies to the natural persons whose patrimony situation is characterized by the insufficiency of the available funds for the debts payment, as they became due.
The insolvency status of the debtor is presumed when the debtor, after the expiry of a period of 90 days from the due date, has not paid his debt to one or more creditors and there is no reasonable probability of becoming solvable in a period of maximum 12 months. Therefore, the individuals who have debts older than three months compared to at least one creditor, can use the provisions of this law.
The conditions of application
The following procedures of Law 151/2015 are applicable to the debtor natural person:
– which is in insolvency;
– whose obligations do not result from the operation of an enterprise;
– has had the domicile or the residence for at least 6 months prior to the application being submitted in Romania;
– the total amount of his debts is at least equal to the threshold-payment (the minimum amount for debts should add up to 15 minimum wages per economy – 15X 2,230 lei = 33,450 lei);
– has not been a subject of such a procedure, less than 5 years before a new application for enforcing the insolvency proceedings.
The procedure of application and the effects of the initiation of the insolvency proceedings
The formulation of the application
– in order to initiate the insolvency procedure, natural persons in debt can formulate a initiative request for insolvency proceedings based on a debts repayment plan. It is submitted to the insolvency committee in which district the debtor had his domicile or his residence for at least 6 months prior to the application for insolvency proceeding.
– in case the debtor considers that his financial situation is compromised irremediable, and the debts repayment plan cannot be elaborated and implemented, he can draft a petition directly to the competent court for the initiation of the insolvency proceedings through liquidation of assets. The petitions from the insolvency proceedings through liquidation of assets are the competence of the court in which district the debtor had his domicile or his residence for at least 6 months prior to the application for insolvency proceeding.
The suspension ipso jure of the enforcement procedure
A prime effect of the innovation of insolvency proceedings is the provisions abeyance, by right, of certain enforcement measures that are taken to satisfy the creditors’ claims and also the prescription abeyance of the creditors right to request for an enforcement procedure fore claims against the debtors.
The natural persons in insolvency can use one of the following forms of insolvency procedure:
- The insolvency proceeding based on a plan of repayment the debts
This procedure is initiated by redacting a request for insolvency proceedings by the debtor, the debtor’s spouse, fiancée or even his/her concubine in the case they have mutual belongings or obligations. The request it is later examined by the insolvency commission that can admit or dismiss it, and case of admitting the request for insolvency proceedings, it is designed an administrator that will elaborate a plan of discharging the debts with the debtor and the approval of the creditor. The duration of the plan is at least 5 years from the date of the definitive decision to enforce the insolvency procedure on the basis of the debt repayment plan and must be approved by the creditors representing at least 55% of the total value of the debts and 30% of the value of the receivables causes of preference
- Insolvency judicial procedure by liquidation of assets
The opening of the insolvency judicial procedure by liquidation of assets by the court instance is made by application of either one of the creditors or by application of either one of the debtors being in insolvency, if his financial situation is irreparable compromised or if the application for opening of the insolvency procedure based on a debt repayment plan has been denied by the insolvency committee, if none of the plans has been approved or if the repayment plan cannot be fulfilled because of reasons not attributable to the debtor. The application is being examined by the court instance that can deny or approve it and in case of approval it initiates the insolvency judicial procedure by liquidation of assets and appoints a liquidator.
- Simplified insolvency procedure
Natural persons in insolvency can use this procedure if they have debts, to one or more creditors, that are older than 90 days, the total amount is at most 10 minimum wages per economy, has no trackable goods or incomes, is above the standard retirement age or has lost all or at least half of his work capacity. In case of admission of the application, the insolvency committee notifies the debtor to comply with the following obligations for the next 3 years from the notification: pay the current debts as they become due; not to contract new loans; to provide annual, to the insolvency committee, a information regarding his patrimonial situation; to inform the insolvency committee as soon as he gets extra income, to inform the insolvency committee regarding the acquisition of any title, including inheritance or donations, of goods and services which value exceeds the minimum wage in the economy.
Therefore, the natural persons who have doubts that older than 90 days, to one or more creditors, can remedy this situation by establishing a debt repayment plan by liquidation of assets or by the simplified procedure.
If you need more information, you can contact us at the headquarters of our law firm in Sibiu, str. Spartacus, no. 13A, Sibiu County, by phone at: 0720291919 or by e-mail at: [email protected]