Bancruptcy of individuals

Upon a bankruptcy order, a separate legal entity called a bankruptcy estate is created.
A Trustee is appointed and has custody of the bankruptcy estate.

The trustee publishes a notice in the Official Gazette stating that the debtor’s estate has been placed into bankruptcy proceedings. This notice is referred to as a Call for Claims.

The Call for Claims gives creditors a specified deadline for submitting their claims to the trustee. This provides creditors with an opportunity to assert their claims against the bankruptcy estate.

Closure of Bank Accounts

• Immediately following the District Court’s ruling to commence bankruptcy proceedings, the trustee will request that all bank accounts and payment cards be closed.

• It is often possible to open a new deposit account without an overdraft facility or obtain a prepaid card.

Valuation and Administration of Assets

• The trustee determines how the assets and rights of the bankruptcy estate are to be administered. The trustee also examines whether any transactions that may be subject to avoidance have taken place prior to the bankruptcy, such as the concealment or disposal of assets.

• An individual is permitted to retain their wages while the bankruptcy proceedings are ongoing.

• An individual may retain assets that are exempt from attachment, such as movable property necessary to maintain a modest household, essential movable property due to disability or ill health, or items used in connection with their occupation, subject to applicable maximum-value limits.

• The bankruptcy estate takes over the individual’s interest in a company and seeks to realise its value.

Other Measures

• The trustee may terminate a lease agreement.

• The trustee may request that the debtor be removed from the register of employers and that their VAT registration be cancelled.

• Bankruptcy can end with the distribution of funds to creditors if there are assets in the estate,
  or without allocation if there are no assets.

• Debts that cannot be paid at the time of the exchange expire (lapse) when 2 years have passed since the end of the exchange, unless the statute of limitations is terminated. (This does no apply to student loans)

Read more about expiration period

• Bankruptcy proceedings generally take several months.

• If the proceedings take longer than expected, you should contact the trustee.

• If bankruptcy proceedings have been ongoing for one year, the District Court will request an explanation from the trustee as to why the proceedings have not been completed and ask when the trustee expects the proceedings to be completed.