Basic Information about the Insolvency Act

The Insolvency Act - Act No. 182/2006 Coll., on Insolvency and Its Resolution (Insolvency Act) came into force on January 1, 2008, replacing Act No. 328/1991 Coll., on Bankruptcy and Composition. The benefit of the new legislation is particularly the strengthening of the position of the creditor and the establishing of a publicly accessible electronic insolvency register as an important source of information on the course of individual insolvency proceedings.

The Act specifies the manners of solving the bankruptcy and the impending bankruptcy of a debtor on the basis of a court proceeding by one of the stipulated methods, resulting in the arrangement of property relations towards persons affected by the debtor's bankruptcy or the impending bankruptcy, achieving the highest and principally proportional satisfaction of the debtor's creditors. Furthermore, it regulates the debtor's discharge of debts.  

Insolvency proceedings - Insolvency proceedings are legal proceedings, the object of which is the debtor's bankruptcy or the impending bankruptcy and the method of solving it. It may be initiated in relation to any debtor (physical entity, legal entity, entrepreneur and non-entrepreneur) with the exception of the Czech Republic, municipal and regional authorities, Czech National Bank, General Health Insurance Company, public higher education institutions - etc.

Insolvency petition - the insolvency proceedings are initiated on the basis of an insolvency petition.  If the petition is lodged in writing, it must be affixed with an officially verified signature. The electronically submitted insolvency petition requires a guaranteed electronic signature.

If the petition is lodged by the creditor, it is necessary to specify on what grounds he assumes the bankruptcy of the debtor, substantiate his allegations with evidence and attach the request for admittance of his claim. The petition must clearly determine who the petitioner is and who the debtor is and why there is the presumption of bankruptcy. The petition is to be filed with the regional court, in which the debtor has his place of residence or registered office.
Insolvency Register - the Insolvency Register is the main pillar of the new legislation. It is an information system, through which most court decisions are delivered. It is publicly accessible and displays all important information about all insolvency proceedings in an almost "live broadcast". Not only creditors and debtors, but anyone can access information about the proceedings through the register.

Some of the important deadlines for creditors:

• the claims must be registered no later than before the lapse of  the period set in the court decision on the bankruptcy. Otherwise, they will not be taken into account, i.e. they will not be satisfied in the insolvency proceedings;   

• failure to amend the insolvency petition within the period set by the court will result in its rejection;   

• in the case of a claim denied by the receiver in bankruptcy it is necessary to exercise one's right with an action for determination with the  insolvency court, within 30 days from the review hearing (this period will expire after 15 days from the delivery of the notification of the claim denial, unless the creditor was present at the review hearing); failure to meet the deadline results in the claim, the genuineness of which was denied, not being taken into account.