Insolvency of natural persons
The procedures provided by the new law are applied to the debtor-natural person whose obligations do not arise from the exploitation of an enterprise and who:
- has been domiciled, resident or a regular resident of the Romanian state for at least 6 months prior to the submission of the application;
- is in state of insolvency and there is no reasonable probability to become again, in a period of maximum 12 months, able to honor its obligations as they have been contracted, with the maintenance of a reasonable living level for itself and its dependent people;
- the total amount of its outstanding obligations is at least equal with the threshold value of 15 minimum wages.
Insolvency is defined by law as that state of the debtor’s patrimony which is characterized by the insufficiency of the available funds for the payment of its debts, as they become due. The debtor’s insolvency is presumed when the debtor fails to pay its obligation towards one or more creditors after a period of 90 days from the due date. The presumption is relative.
The insolvency procedures ruled by the new law are:
- the insolvency procedure based on a debt reimbursement plan;
- the judicial procedure of insolvency based on asset liquidation;
- the simplified procedure of insolvency.
The law comes into force in December.
WHO APPLIES THE INSOLVENCY PROCEDURE TO NATURAL PERSONS
The bodies who apply the insolvency procedures are:
- the Insolvency Commission and the procedure administrator,
- the courts of law,
- the liquidator
The Insolvency Commission is the territorial administrative body who is the main responsible for making decisions, controlling and monitoring the insolvency procedure, being supported in this fulfilment by the procedure administrator or liquidator.
The Insolvency Commission is established at central level, as well as within the territory, for each county.
At central level, the Insolvency Commission is formed of the representatives of each of the following institutions: the National Authority for Customer Protection, the Ministry of Justice, the Ministry of Labour, Family, Social Protection and the Elderly, the National Trade Register Office – the Directorate for Insolvency Procedure Reports
At territorial level, the Insolvency Commission is formed of the representatives of the structures distributed within the territory by the National Authority for Customer Protection, the Ministry of Labour, Family, Social Protection and the Elderly, as well as of a representative of the Ministry of Public Finances.
The administrator of the procedure administers the insolvency procedure based on a debt reimbursement plan, under the control of the insolvency commission. The administrator is appointed by the Insolvency Commission from the practitioners in insolvency, bailiffs, attorneys and notaries public entered on the List of administrators of the procedure and liquidators responsible for the procedure of insolvency of natural persons. The conditions of subscription on the List are indicated in the legal act.
The liquidator administers the judicial procedure of insolvency through the asset liquidation, under the control of the court of law and it performs the supervision provided by law for the period of judicial post-procedure of insolvency based on the asset liquidation, under the control of the Insolvency Commission. The liquidator is appointed by the court from the practitioners of insolvency, bailiffs, attorneys and notaries public entered on the List of administrators of the procedure and liquidators for the procedure of insolvency of natural persons.
The actions taken during the judicial procedure of insolvency based on the asset liquidation, the challenges of the decisions of the Insolvency Commission and the applications for exemption from debts fall under the competence of the court from the territory where the debtor has had the domicile, residence or main residence for at least 6 months prior to the date when the case is brought before the court. Judgments delivered by the judges are subjected to the appeal at the tribunal. The judgments of the tribunal are final.
The debtor benefitting from an insolvency procedure, who has determined its termination for imputable reasons, will not be able to file for a period of 5 years from the termination date, any application for the initiation of a new procedure.
At the request of any person concerned or ex officio, the court of law can order also, through the judgment of procedure termination, for reasons imputable to its debtor or through the judgment of revocation of the benefit of exemption from debts, one of the following interdictions:
- to be appointed administrator/ director, manager of an autonomous administration, national company or firm ruled by Law on commercial company no. 31/1990, or other similar titles, which assume decisions regarding the administration of goods and accounts, within a public or private legal entity, for 5 years from the end of the procedure or from the revocation of the benefit of exemption from debts, and if he holds one of these titles, he will lose this right for the same period;
- to have the capacity of credit organiser or to exert the duties specific to the credit organiser for 5 years from the end of the procedure or from the revocation of the benefit of exemption from debts and, if he has this capacity he will lose this rights for the same period.