The consumer system is a poorly known option for debtors falling into financial problems. In some scenarios, it may be a much better way out than bankruptcy. We talk with Łukasz Lewandowski, a lawyer and restructuring adviser about his pros and cons.
Michał Kisiel, Bankier.pl: Few potential fallen are aware that there is a different way than the “default” – consumer system. What is this path and how is it different from ordinary consumer bankruptcy?
Łukasz Lewandowski, lawyer, restructuring advisor*: Indeed, the consumer system is a less popularized solution than consumer bankruptcy, which everyone has already heard of. The consumer arrangement is a procedure in which insolvent natural personinstead of the liquidation of the entire property by the trustee, leads to an agreement with creditors
in terms of repayment of your obligations.
This proceedings are conducted under the supervision of court and court supervisor, and its purpose is simple – debt restructuring while maintaining assets. In practice, the debtor, with the support of a court supervisor, prepares arrangement proposals (e.g. distribution of repayment into installments, partial redemption, postponement of payments), which are then presented to the creditors to vote at the meeting. If the majority of creditors accept the arrangement, the court approves it, and the debtor fulfills the repayment in accordance with the adopted arrangement – while maintaining his property, including often the property in which he lives.
For a change, Consumer bankruptcy almost always leads to the reset of property (sale of an apartment, car, liquidation of a life policy, etc.). Ultimately, consumer bankruptcy is also aimed at debt relief in the form of a court determining the repayment plan, however, there are situations when the court refuses to determine the repayment plan and the bankrupt remains without the property and debts. Skeptics of the consumer system argue that there is too much uncertainty whether the system will be concluded, i.e. whether the creditors will agree to it. On the other hand, the successful final of consumer bankruptcy depends on the court that can assess the debtor negatively (as one that intentionally led to his insolvency) and not protect him against creditors in the form of a repayment plan.
In what cases can the consumer system of restructuring be a favorable solution for the debtor? Who should be recommended for this option?
The consumer system is dedicated to people who have assets (e.g. apartment, house, etc.) and who have not lost control of their finances. Very often in consumer bankruptcy I deal as a trustee with people who do not know how debts they have, from what contracts these debts arise, and even if they have any property. Of course, this is often due to depression or chronic functioning in a gray zone.
For a change, the consumer system is a solution for people aware of their property situation, very often on a life bend, but not yet in the abyss. The consumer system is also for people whose causes of insolvency are clear and justified to creditors (e.g. loss of work for non -related reasons, illness, etc.) – it matters that in the end creditors vote for the arrangement.
Let's say, what are the preliminary conditions of using the consumer system and what are the next steps in this process.
The preliminary condition for using consumer bankruptcy is being a natural person not conducting business activity (no entry in CEIDG) and state of insolvency. In the case of consumers (unlike entrepreneurs) to determine that you are insolvent, All you need is a debt to only one creditor (e.g. a mortgage) that is not regulated on an ongoing basis.
The first step in the process of consumer bankruptcy is the submission of an application by the National Register of Debt (it is required to create an account on this portal – it is enough to have a trusted profile) with attachments (list of property, list of creditors, justification, etc.). The application should be paid a court fee in the amount of PLN 30 and an advance payment for expenses (this is one -time average salary in the economy announced by the President of the Central Statistical Office in the third quarter of the previous year – for today it is PLN 8,266.30).
After examining the debtor's application, the court opens the proceedings and appoints a court supervisor, i.e. a person from the list of restructuring advisers, who is to supervise the debtor's activity and support him in the preparation of arrangement proposals, i.e. the idea of repayment of debts for creditors.
The arrangement is accepted at the Congregation of creditors when reaching the appropriate majority (20 % of creditors must take part in the vote, and among the creditors participating in the vote over 50 percent must be behind the arrangement and represent a minimum of 67 % of debts from among voting creditors). Then the system is approved by the court, and the debtor repays its debts on the dates and amounts provided for in the arrangement (at this time, of course, bailiff enforcement cannot be carried out).
What should you warn the considering use of the consumer arrangement of arrangement bankruptcy? What pitfalls can this scenario to get out of financial problems?
Each debtor, before starting the process of the consumer system, must keep in mind that his financial problems will end only when creditors accept the system. The opening of the proceedings is time protection, i.e. in the absence of acceptance of the system, the debtor returns to the starting point. Therefore, the most important in this proceeding is voting on the arrangement, and earlier Preparation of proposals attractive for the creditor systemic with the support of a restructuring advisor. In addition, it is extremely important proper assessment of your abilitiesi.e. adds the analysis to which the debtor can afford, so how much a month will be able to reduce the household budget and allocate these funds to pay the arrangement installments.
Can you expect changes in the law in the field of consumer bankruptcy in the near future?
More and more often among practitioners there are demands that consumer bankruptcy is announced by restructuring advisers instead of a court. There are several reasons. First of all, bankruptcy judiciary is significantly overloaded with the influence of cases of consumer bankruptcy. Secondly, the restructuring advisers today largely relieve the courts as part of the system approval (so -called PZU), where they open PZU and supervise the entire proceedings themselves, the court only approves the agreement.
From the practice of practice, what are the most important disadvantages of current regulations?
It is primarily the time needed to hear the case. The length of the proceedings is a negative phenomenon both from the debtor's perspective (e.g. the trustee for the duration of the proceedings makes the deduction of the bankrupt's remuneration) and the creditor, who has been waiting for many months to determine (or not) the repayment plan of creditors. In my opinion, delegating additional competences to the declaration of consumer bankruptcies to restructuring advisers will significantly reduce the time of recognizing cases for the benefit of both creditors and debtors.
Thank you for the interview.
*Łukasz Lewandowski – partner and director at the DSK DEPA Kuźmiak Jackowski Chancellery, where he manages the procedural department and service of entrepreneurs. Lawyer and restructuring advisor.
