The Law on Amendments to the Consumer Bankruptcy Act, which entered into force on the 1 January 2019, introduces a new institute of simple consumer bankruptcy proceeding, an accelerated and simplified procedure aimed to settle the creditors from eligible assets and to relieve the consumers of the remaining debt.
The precondition for conducting a simple consumer bankruptcy procedure is that the consumer has a debt recorded in the Register of the order of bases for payment for a continuous period of 3 years for the amount of principal up to 20.000,00 HRK.
The procedure is completely free for the consumer (the consumer is not obliged to pay a court fee). The procedure is initiated ex officio by FINA, and any costs of the commissioner are paid from the state budget.
A simple consumer bankruptcy procedure is initiated ex officio by FINA according to its records, after the consumer has been allowed to state whether he agrees of conducting the procedure.
FINA will invite all consumers who meet the requirements for a simple consumer bankruptcy procedure to state within 15 days whether they agree to a simple consumer bankruptcy procedure over their assets.
If the consumer agrees with the procedure, he is obliged to submit an inventory of his property within the specified period, and may also submit a proposal to conduct a simple bankruptcy procedure of the consumer in relation to creditors who have withdrawn the basis for payment. The statement and the list of assets are submitted on the prescribed form.
If the consumer does not comment within the deadline or submits a list of assets without expressing his consent to the procedure, the consumer will be deemed to have agreed that a simple bankruptcy procedure of the consumer over his property can be carried out. Also, if he manifests that he agrees to conduct a simple bankruptcy procedure of the consumer over his property but does not list the property, the consumer will be deemed to have declared that he has no property from which his creditors can be settled.
It is noted that the basic criterion that must be met in order to get rid of the consumer's obligations is that he has to be a fair consumer. If it is established during the proceedings that the consumer is not fair, the proceedings against him will not be able to be reopened for the next five years.
In the procedure forms will be used with the aim of making the procedure as simple and understandable as possible for consumers, since they contain all the necessary information about the procedure, so that the consumer is informed of his rights and obligations.
A proposal for the implementation of a simple consumer bankruptcy procedure is submitted by FINA to the competent municipal court on the prescribed form in electronic form in case when the consumer has agreed to conduct a simple consumer bankruptcy procedure over his property, or if the consumer is deemed to agree to procedure.
If the proposal for conducting a simple consumer bankruptcy procedure is established, the court will publish an invitation on the court's e-bulletin board to all consumer creditors to challenge the list of assets submitted by the consumer and / or to inform the court about the consumer's property within 45 days of the invitation, which could be liquidated as a bankruptcy estate in the event that a simple consumer bankruptcy procedure is opened and to provide evidence on which to base their claims.
The court is obliged to determine the value of the consumer's property, as well as the disposal of property that the consumer has undertaken in the last three years before the opening of a simple consumer bankruptcy procedure. The value of the consumer's movables or rights is determined by the court's conclusion based on a free assessment. The court may entrust the assessment to a bailiff or a court assessor or a special expert.
If the court determines that the value of the consumer's property that could be liquidated as a bankruptcy estate is equal to or less than 10.000,00 HRK, it will ex officio issue a decision on opening and concluding a simple consumer bankruptcy procedure.
In this case, the court will not appoint a trustee, nor set a conduct review period, but it will release the consumer from the remaining obligations relating to the payment bases and creditors for whom a simple consumer bankruptcy proceeding has been initiated.
If the court determines that the value of the consumer's property that could be liquidated as a bankruptcy estate is higher than 10.000,00 HRK, it will ex officio issue a decision on opening a simple consumer bankruptcy procedure and appoint a commissioner.
The court may appoint an attorney at law from the list of attorneys at law appointed by the Croatian Bar Association or the bankruptcy trustee registered in list A or list B of the bankruptcy trustees for the area of the commercial court in whose territory the seat of the municipal court is located and which conducts consumer bankruptcy proceedings.
Lists of attorneys at law who can be appointed as trustees are posted on the e-bulletin board of the courts at the following link.
If the consumer has a permanent non-enforceable income, the court will order the consumer to pay a certain amount of permanent income to the court account within 12 months of the decision on opening a simple bankruptcy procedure, which the court will determine by applying the rules of enforcement law on enforcement restrictions on permanent cash receipts.
The bankruptcy trustee or attorney at law appointed as a trustee is obliged to cash in the movables or claims, shares, business stakes, securities and other property or material rights stated by the consumer in the list of assets within 12 months of the decision on opening a simple bankruptcy procedure or whose existence has been established by the court.
Movable property and rights that are not redeemed within the specified period are considered non-redeemable assets and remain with the consumer.
- Considering that the amount of receivables is up to 20.000,00 HRK, immovable properties owned by consumers are not considered as liquidable property and cannot be used to settle creditors.
After the liquidation of property and rights, ie after the consumer fulfills the imposed obligations from permanent cash income according to the court decision and if the conditions for suspension of simple consumer bankruptcy proceedings are not met, the court will conclude a simple consumer bankruptcy procedure without determining a period of conduct.
In the decision on concluding a simple consumer bankruptcy procedure, the court will release the consumer from the remaining obligations relating to the bases for payment and creditors for which a simple consumer bankruptcy procedure has been initiated.