Slovakia: voluntary bankruptcy

The key changes introduced by the new rules are:

• a more detailed definition of insolvency: it arises when a person or business registers more than one creditor and is unable to pay more than one monetary debt within 30 days of its becoming due. All amounts originally owed to the same creditor during the 90 days before a petition is filed are treated as a single debt, so a single creditor who assigns part of his debt to someone else in order to create another creditor would have to wait another 90 days from assignment before being able to file a petition
• a person becomes over-indebted where he is required to maintain accounts, the accounts show more than one creditor, and the value of immediate liabilities exceeds the value of his assets
• insolvent debtors must file a bankruptcy petition within 30 days of the date they discover or could have discovered that they are insolvent. Where bankruptcy is filed on the debtor’s behalf, such as by a director on behalf of a company, that director is responsible for any loss suffered by the creditors as a result of the late filing, unless he can show that he acted with due care
• the bankruptcy petition must declare that the debtor is insolvent, show that his liabilities exceed his assets, that he has more than one creditor and cannot pay more than one monetary debt within 30 days of its becoming due. It need not explain how he came to be insolvent
• the bankruptcy petition should be accompanied by various documents, all of which are made publicly accessible at www.zbierka.sk:

• a statements of his assets, to show whether they are sufficient to cover the cost of bankruptcy proceedings (ie at least SKK 200,000, c EUR 4800 )
• a statement of his liabilities, so that his application for bankruptcy can be evaluated
• a statement of executed contracts, with a summary of obligations contained in each
• a list of associated persons, including family members (usually just spouse and children), statutory representatives, senior officers, attorneys, board members, and holders of a qualified interest in the debtor’s company and its or their associated persons. Qualified interest means any direct or indirect interest of at least 5% in the share capital or voting rights or the opportunity directly or indirectly to exercise management influence
• the most recent financial statements including profit and loss account, balance sheet, any notes to the financial statements and, where audited, the auditor’s report

• the bankruptcy petition is exempt from court fees but the petitioner must pay SKK 50,000 (c EUR 1200) towards the fees and expenses of the court-appointed trustee (chosen at random) and attach a payment certificate to the petition
• the petition, and the statements of assets, liabilities and contracts must all be signed by the debtor (or by a director on behalf of a corporate debtor) and notarised. The letters must be complete and true, and the director is liable for the contents thereof, otherwise, he could be deemed to commit an offence of frustrating bankruptcy proceeding. This will prove that at the time of filing the petition, the debtor has obligations towards several creditors and has been in default for more than 30 days
• the relevant district court will issue an adjudication order initiating the bankruptcy and at the same time invite all the debtor’s creditors to register their claims within 45 days of the adjudication order
• the creditors’ claims must be made on a prescribed form which:

• must be dated and signed by the creditor
• includes a warning that applications which fail to include all the required information, are not signed or date or not made on the correct form will be excluded from the bankruptcy
• must set out the legal basis for the debt
• must set out its ranking for payment
• must set out the amount of the debt, with a breakdown of principal and other amounts (eg interest) and a statement of the legal basis for claiming it
• must set out any security taken for the debt

• the bankruptcy proceedings do not start until the day after the adjudication order is published in the Commercial Journal. The court can reject the bankruptcy petition without prior warning because of a defect in the application. If this happens, an amended petition can immediately be presented but getting a refund of the trustee’s fee takes longer
• the actual bankruptcy does not take effect until the trustee has established that all conditions have been met and the court bankruptcy order is published in the Commercial Journal

Law: Act no. 7/2005 on bankruptcy and restructuring amending other acts; Decree of Justice Ministry no. 665/2005 Coll.