The number of consumer insolvencies is increasing year on year. At the end of 2021, there were 18,205 (an increase of 39% compared to 2020). It is estimated that the number of consumer bankruptcies in the coming years will reach 30,000-35,000 (1 bankruptcy per 1,000 inhabitants).
Consumer bankruptcy offers debtors the chance to obtain debt relief (a way out of debt, a “fresh start”), in three ways:
1) the most far-reaching one – waiver of liabilities without setting a repayment plan (in case of permanent inability of the debtor to make repayments under a repayment plan);
2) Conditional cancellation without setting up a repayment plan (for a period of 5 years where the inability of the debtor to meet the repayment plan is not permanent);
3) setting a repayment plan (partial repayment of debts within a period of, as a rule, 36 months or up to 84 months in the case of the so-called negative assessment of the debtor’s payment morality, understood as deliberately bringing about or increasing the scale of bankruptcy); otherwise, debts are written off.
Only in extreme cases, the so-called negative assessment of the debtor’s payment morality (intentionally leading to or increasing the scale of bankruptcy), can the proceedings end in a refusal of debt relief.
Thanks to the effect of debt relief, the debtor is the main beneficiary of the proceedings. Despite this, it is important that the debtor’s interests are properly represented by a professional proxy in the proceedings. The court is not bound by the debtor’s position regarding the content of the plan of repayment of creditors. When establishing the plan of repayment of creditors, the court takes into account the bankrupt’s earning capacity, the need to maintain the bankrupt and his dependents and their housing needs, the number of unsatisfied claims, and the degree of satisfaction of claims in bankruptcy proceedings.