Serious dissatisfaction with a new law is emerging in our banking sector.
The Association of Banks in Bulgaria suggests that the current draft of the Law on Insolvency of Individuals be specified in an opinion on the proposed draft submitted by the PP-DB to the National Assembly, our Money reported.
In the law, there is a special provision for bankruptcy proceedings for citizens without property and income. In such cases, the court is expected to open bankruptcy proceedings and suspend them for a period of one year. In this period, the debtor can request its resumption, provided that he proves that he has sequestrable property, which is sufficient to cover the initial expenses and partially satisfy the creditors’ claims.
If the debtor does not request a resumption of the proceedings within a year, the court terminates them. According to the Association of Banks, however, this is a very short period, and the consequences, if the debtor has not included these receivables in his declaration, are repayment in accordance with Art. 97 of the Bill.
It is envisaged that the assessment of the presence of sufficient property will be made only on the basis of the data declared by the debtor in his application, without the court having the obligation to check whether they correspond to the truth, the opinion says. According to the banks, this will lead to more problems, and take advantage of unscrupulous debtors.
According to them, it is not right to have no restrictions on the debtor’s legal sphere after the proceedings are completed, as the possibility of easily clearing the debts without any consequences for the debtor will lead to instability in the business turnover.
They also insist that a request to establish the conditions for repaying the debts can be submitted once by the debtor, and not as it is now provided for.
The bill states that the absolute statute of limitations ceases to run for the duration of the bankruptcy proceedings. According to the association, however, the absolute statute of limitations should be entirely inapplicable in relation to claims that arose before the termination of bankruptcy proceedings under the Commercial Law and the Personal Bankruptcy Law.
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