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Law change could prompt more bankruptcies by simplifying process

A major amendment to the law on bankruptcy elaborated by Justice Minister Lucia Žitňanská and approved by MPs will become effective as of next year and might increase the number of bankruptcies, the Sme daily reported on Friday, September 16. According to the amended law, creditors will be able to propose the bankruptcy of their debtors much earlier than they are able to now.

A major amendment to the law on bankruptcy elaborated by Justice Minister Lucia Žitňanská and approved by MPs will become effective as of next year and might increase the number of bankruptcies, the Sme daily reported on Friday, September 16. According to the amended law, creditors will be able to propose the bankruptcy of their debtors much earlier than they are able to now.

The amendment also aims to address speculative bankruptcies in which the creditor is someone close to the debtor. When dividing the money from forced sales, the legal representatives or owners will be the last to have their claims settled.

Lawyers asked by Sme agreed that the amendment would change the behaviour of companies. The amendment stops speculative bankruptcies, introduces new penalties, makes bankruptcy easier for creditors, makes forms for filing claims simpler, allows creditors to file their claims at any time, and makes the bankruptcy rules more transparent, Sme reported.

Source: Sme

Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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