Bankruptcy moratorium

In order to ensure economy’s stability in tough circumstances the Government has the right to impose moratorium on bankruptcy. This measure can only be applied in exceptional cases and it does not allow to initiate bankruptcy case. Therefore, if creditor applies to the court during moratorium with aim to declare his/her debtor insolvent, the court will not accept such claim.

Moratorium has following advantages for debtors:

• Impossibility to declare company or sole proprietor insolvent.
• No financial penalties for violation of monetary obligations.
• “Freezing” of penalties on the mortgaged property.
• Suspension of enforcement proceedings for property penalties.

Who can be subject to moratorium?

Bankruptcy moratorium is automatically applied to all those who are listed in governmental Decree. Therefore, company or sole proprietor is entitled to waive restrictions imposed by authorities and allow creditors to apply for debtors’ bankruptcy. Thus, such measure does not postpone measures that are planned to be executed. In addition, the debtor is still entitled to file for own bankruptcy.