Insolvency is the state of a person’s (debtor’s) assets that is characterized by insufficient funds to pay debts.<\/span><\/p>\n The insolvency of a natural person will be presumed if, within 90 days of the due date of the obligation, the debtor has not paid the existing debts and the creditor can easily assume, on the basis of justified grounds, that the debtor will not have sufficient assets to meet his obligation within the next 12 months.<\/span><\/p>\n Insolvency proceedings of an individual can be carried out in three ways, all regulated by Law 151\/2015. Thus, on the one hand, there is an out-of-court variant, called insolvency proceedings based on a repayment plan, whereby the debtor expresses his willingness to his creditors to execute the obligation consisting in the repayment of the debt, in full or in installments. The other two procedures involve the involvement of the court, i.e. the judicial liquidation of assets or the simplified procedure.<\/span><\/p>\n Insolvency proceedings on the basis of a repayment plan involve the creditor and the debtor agreeing on a strategy for settling the claim, which will include a number of elements such as the method of payment of the debt, the amount of an instalment, the payment deadlines and the measures that the creditor may take if the debtor fails to meet his payment obligations.<\/span><\/p>\n The judicial liquidation of assets procedure is a judicial procedure and involves the sale of assets held by the debtor in order to cover his existing debts.<\/span><\/p>\n The simplified insolvency procedure, like the liquidation of assets procedure, is judicial in nature, but does not involve the sale of the debtor’s assets to cover debts. The simplified insolvency procedure5 involves imposing obligations on the debtor for a period of three years in order to restore the debtor’s financial situation and to discharge the debts he has incurred.<\/span><\/p>\n This procedure can be used by:<\/span><\/p>\n The opening of insolvency proceedings requires the following preliminary steps to be completed<\/span><\/p>\n Any natural person who has been domiciled or residing in Romania for at least 6 months prior to the filing of the application and who is acting in good faith and does not seek to defraud creditors may apply for insolvency proceedings.<\/span><\/p>\n There are also 7 categories of debtors who cannot opt for this procedure<\/span><\/p>\n\n
HOW TO OPEN INSOLVENCY PROCEEDINGS?<\/b><\/h3>\n
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