Methods of debt recovery – 7. Opening insolvency proceedings against the debtor
Debt recovery concludes with the enforcement, by any method permitted by law, of the amounts awarded in court.
In case, after obtaining an enforceable court decision, the debtor does not voluntarily settle the debt, and the debtor, a legal entity, is unable to pay, voluntarily or involuntarily, the law allows the creditor to request the court to open insolvency proceedings under certain conditions. Thus, if enforced execution proves futile, the creditor may explore this method as a means of recovering the held debts.
To do this, the law imposes some requirements, requirements designed to discourage or make abuses of rights impossible, the situation of insolvency being one of the debtor’s treasury and not of their assets.
The application for opening insolvency proceedings may only be filed by the debtor’s creditors if the conditions for the presumption of manifest insolvency are met.
The presumption of manifest insolvency (relative presumption) is established when, after 60 days from the due date, the debtor has not paid their debt to the creditor. However, insolvency is imminent when it is proven that the debtor will not be able to pay the exigible debts incurred, with the available monetary funds on the due date.
The application for opening insolvency proceedings may only be filed if the debt invoked by the creditor who filed the application for opening insolvency proceedings exceeds the threshold value of 50,000 lei. Multiple creditors may aggregate their invoked debts in order to exceed the threshold value.
The application for opening insolvency proceedings must contain all the elements of a regular lawsuit and, additionally, details regarding the debt as well as justifying documents. The stamp duty is 200 lei.
The syndic judge may either admit the application for opening or reject it as being without merit (in case the debtor has settled their debt to the creditor by the date of the opening of the insolvency proceedings), or reject the application as unfounded, considering that the debtor is not insolvent.
If the syndic judge orders the admission of the application for opening insolvency proceedings, they will order the opening of either the general procedure (thus allowing for the voting of a reorganization plan and the debtor’s reorganization) or the simplified procedure (the debtor entering directly into the liquidation procedure).
The judgment of the syndic judge by which they resolved the application for opening insolvency proceedings may be appealed to the higher court, respectively to the court of appeal within the jurisdiction to which the tribunal or specialized tribunal seized with the application for opening insolvency proceedings belongs.
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Vladimir Catargiu – Attorney at Law
