Debt relief for a natural person, commonly called personal bankruptcy, is a legal way to get out of debts you can no longer repay. It is intended for people who have become insolvent and see no realistic option to settle their obligations the usual way. The goal is to give an honest debtor a second chance and the opportunity to start over.
To be able to apply for debt relief, you generally have to meet several basic conditions. These include in particular being insolvent, having your centre of main interests in Slovakia, and having enforcement proceedings already conducted or ongoing against you. It is also important to approach the entire process honestly and transparently, as a dishonest intention may be grounds for cancelling the debt relief.
In practice there are two main routes to debt relief – bankruptcy and a repayment schedule. In bankruptcy, the property you own is liquidated and the remaining debts are forgiven. With a repayment schedule, on the other hand, you keep your property but repay part of your debts during a set period according to an approved plan. Which route is more suitable for you depends on your specific situation, income and property.
The procedure itself begins with filing a petition, which is usually preceded by contacting the Centre for Legal Aid. The court then decides on declaring bankruptcy or setting a repayment schedule, and an administrator enters the process. It is good to know that debt relief is not a solution for absolutely all types of obligations – some claims, such as maintenance payments or certain penalties, may remain excluded from the relief.
Debt relief also has consequences you need to count on. Information about it is publicly available, it may temporarily affect your creditworthiness, and the debtor is expected to behave honestly even after it ends. That is precisely why it is advisable to consider and prepare this step well, to avoid complications and unnecessary mistakes in the petition.
If you are considering personal bankruptcy and are unsure which route is best for you, we will be glad to help. At Kohút & Partners in Zvolen we will assess your situation for a firmly agreed price and answer your question within 24 hours. Get in touch and together we will find a way to start over.