In order to be able to recover at least a part of the creditor’s claim, the creditor must first be active in monitoring whether the debtor has not been declared insolvent in insolvency proceedings.
It is possible to obtain such information free of charge in the insolvency register, where the creditor can check not only whether the debtor’s insolvency proceedings have been declared.
Moreover, the insolvency register contains the information regarding the date of commencement of insolvency proceedings, the deadline for the application of creditors, obtain information about the debtor’s insolvency administrator, and obtain information about the creditors’ meetings.
Although in everyday life the term creditor means any person who has a claim against the debtor, in the framework of insolvency proceedings only a person whose right of claim has been duly recognized in the particular insolvency proceedings is considered to be a creditor. Thus, the creditor must be active and submit his claim in time, otherwise he may completely lose his claim against the debtor.
The creditor may submit his claim to the debtor’s insolvency administrator within one month from the date on which the entry is made in the insolvency register regarding the declaration of insolvency proceedings. The exact application deadline can be found in the insolvency register. In case of missed deadline, the creditor may submit the claim within six months, but not later than until the day when the plan for settling the claims of creditors has been drawn up, which may also take place within a shorter period. It should be borne in mind that in this case the creditor will not be granted voting rights at the creditors’ meeting.
The Insolvency Law provides the creditor with a number of ways in which he can engage in and influence the debtor’s insolvency proceedings. For example, the creditor has the right to raise various types of objections, including documents prepared by the administrator, such as the plan for the sale of the debtor’s property or the report on the non-existence of a debtor’s property, the administrator’s intention to renounce the claims, perform the cessation of the right to claim, enter into a settlement, or extend the deadline for selling of non-pledged property. The mentioned list is not exhaustive and the Insolvency Law grants the creditor the right to object also in other cases specified by law. The creditor may also request an audit of the administrator’s actions in the context of a particular insolvency proceeding. However, it should be borne in mind that the audit is financed by the creditors themselves who have requested it.
One of the most important possibilities for the protection of the creditor’s rights is the creditor’s right to request the administrator to convene a creditors’ meeting. A creditors’ meeting is an organized form of joint action of creditors for decision-making, within which creditors can decide on many issues that are important in the insolvency proceedings. For example, creditors may decide to determine the administrator’s remuneration, propose the administrator’s removal from the proceedings, approve the costs of the insolvency proceedings, or decide on the manner of selling the debtor’s property.
The Insolvency Law also provides for cases when a creditor has the right to go to court to protect his interests. Thus, for example, a creditor may appeal in court against the administrator’s decision not to recognize or partially recognize his claim, as well as the administrator’s decision to recognize another creditor’s claim. In other cases, the creditor has the right to apply to the Insolvency Control Service with a complaint regarding the administrator’s actions within the insolvency proceedings. The reasons for a complaint here may be different, for example, if the administrator does not provide the creditor with the information required by law during the insolvency proceedings, it is not possible to contact the administrator or the administrator does not fulfil the obligations prescribed by law.
It should be noted that a creditor can exercise his rights regardless of the amount of his claim. Namely, the principle of equality of creditors works in the insolvency process. Except in certain specific cases where a certain number of votes is required to initiate a particular insolvency procedure or review, the creditor may not be restricted in his right to pursue various actions in the debtor’s insolvency proceedings, even if the unsecured creditor’s claim represents only a small part of the total unsecured creditor’s claim. In order for the creditor not only to be aware of his rights within the specific insolvency proceedings, but also to be able to use them successfully, we invite you to apply for qualified legal assistance to the law office Lumos. The Law firm’s lawyers have extensive experience in dealing with a variety of complex legal situations, including the protection of creditors’ interests. The managing partner of the Law firm is a certified insolvency administrator, and in practice the specialists of the office ensure the conduct of insolvency proceedings of various legal entities.