Insolvency, which is governed by Act No. 182/2006 Coll., can be a solution when a natural or legal person is faced with insolvency. It helps both debtors, who are offered the opportunity to reduce and settle their debts under the insolvency procedure, and creditors, who are reimbursed at least part of their claims.
What is insolvency?
The term Insolvency comes from Latin and means the inability to meet monetary obligations. It is also a short form of insolvency proceedings aimed at resolving a debtor’s bankruptcy or threatened bankruptcy under the terms of the Insolvency Act.
What is insolvency for?
Insolvency is a type of court proceeding aimed at the insolvency of persons. It is also sometimes called personal bankruptcy. It works by the debtor paying off part of their debts and the remaining debts are forgiven. In order to be allowed by the court, the debtor must meet 3 basic conditions:
- He has at least 2 creditors.
- He is unable to pay his debts.
- Has at least 2 debts more than 30 days past due.
House in insolvency
Did you know that entering into debt relief does not automatically mean losing the roof over your head? Even if the debtor lives in their own home or apartment, there are ways to keep that property from being sold.