Guide and frequently asked questions

When is a company considered insolvent?

Insolvency is the state of the estate characterised by the insufficiency of the funds available for the payment of debts that are certain, of a fixed amount and due. The law presumes it when the debtor has not paid a debt to a creditor within 60 days of its due date; the presumption may be rebutted by the debtor.

Am I obliged to apply for the opening of the insolvency procedure?

Yes. A debtor in a state of insolvency is obliged to apply to the tribunal within a maximum of 30 days from the onset of the state of insolvency. If, when the deadline falls, the debtor is engaged in good faith in out-of-court negotiations to restructure its debts, the application must be filed within 5 days of the failure of the negotiations.

Delay carries serious risks: the liability of the persons in management and, where it exceeds 6 months, it may amount to the criminal offence of simple bankruptcy.

Is there a minimum debt value for opening the procedure?

Yes. The threshold value is 50,000 lei, both for the debtor's application and for that of the creditors.

What happens to enforcement actions once the procedure is opened?

From the date the procedure is opened, all judicial and extrajudicial actions and all enforcement measures pursued individually against the debtor's estate are suspended by operation of law. From that moment, creditors' rights can be pursued only within the procedure.

Can the company still operate after the procedure is opened?

Yes. During the observation period and in reorganisation the activity continues, under the supervision of the judicial administrator. The very purpose of reorganisation is the recovery of the company and the payment of the claims in accordance with the reorganisation plan approved by the creditors and confirmed by the syndic judge.

What alternatives exist before insolvency?

The law provides insolvency prevention procedures: the restructuring agreement and the preventive concordat, through which a company in difficulty can restructure its debts on the basis of a plan negotiated with its creditors, without the opening of the insolvency procedure.

What about natural persons unable to pay their debts?

For natural persons whose obligations do not arise from running an enterprise, a separate procedure applies, governed by Law no. 151/2015 on the insolvency of natural persons.

My debtor has entered insolvency. What do I need to do?

To take part in the procedure you must file with the tribunal a claim admission request, within the deadline set by the judgment opening the procedure; this is a maximum of 45 days from the opening. The exact deadline is stated in the judicial administrator's notification and in the Insolvency Proceedings Bulletin.

How do I find out that a debtor has entered insolvency?

Known creditors are notified by the judicial administrator, and the procedural documents are published in the Insolvency Proceedings Bulletin. It is advisable to check the situation of your business partners periodically, so that the registration deadline is not missed.

What happens if I do not file my claim in time?

A creditor who does not file the request within the set deadline is, as a rule, barred from taking part in the procedure and in distributions. An exception is made for creditors who were not notified as required by law, who are deemed by law to be within the deadline.

Do interest and penalties continue to accrue after the opening?

No. No interest, surcharge, penalty or other expense can be added to claims that arose before the opening of the procedure, subject to the exceptions provided by law for secured claims.

In what order are claims paid?

The sums obtained in the procedure are distributed in the order of priority established by law: first the fees and expenses of the procedure, then employee claims, secured claims out of the proceeds of the security, budgetary claims and the other categories, down to unsecured claims. Each category is paid after the previous category has been satisfied in full.

Can I, as a creditor, apply for my debtor's insolvency?

Yes, if you hold a claim that is certain, of a fixed amount and due, of at least 50,000 lei, unpaid for more than 60 days past its due date. The application is filed with the tribunal for the area where the debtor has its registered office.