Insolvency Law at North Macedonia
North Macedonia's insolvency framework is governed by the Law on Bankruptcy (Official Gazette No. 53/2016), which provides procedures for both corporate and personal insolvency. Recent legislative amendments have introduced significant reforms aimed at enhancing debtor protection and aligning with European Union standards.
⚖️ Legal Framework
The Law on Bankruptcy outlines procedures for:
Reorganization: Allows debtors to restructure their debts and continue operations.
Liquidation: Involves the sale of assets to satisfy creditor claims.
The law applies to both legal entities and individuals, with specific provisions for each.
🧑⚖️ Insolvency Procedures
1. Reorganization
Debtors may propose a Reorganization Plan to restructure debts and continue operations. The plan must be approved by creditors and the court. Once approved, it becomes enforceable, and all parties are obligated to adhere to its terms. The bankruptcy administrator oversees the implementation of the plan. (North Macedonia: Saving Businesses – Restructuring vs. Liquidation)
2. Liquidation
If reorganization is not feasible, liquidation is pursued. Assets are sold, and proceeds are distributed among creditors according to established priorities. This process leads to the cessation of business activities and entity dissolution. (North Macedonia: Saving Businesses – Restructuring vs. Liquidation)
🧾 Personal Bankruptcy Reforms
In July 2023, North Macedonia introduced reforms to address personal insolvency:
Statute of Limitations: The statute of limitations on a court decision or settlement ends when a request for enforcement is submitted to a competent executor. Once the enforcement procedure begins, there's a ten-year window to address the debt. (Personal Bankruptcy Reimagined: A Fresh Start for North Macedonia's Debtors, Personal Bankruptcy Reimagined: A Fresh Start for North Macedonia's Debtors)
Interest Rates: In cases where inflation remains below 50% annually, the interest on a debt cannot exceed the principal amount. (Personal Bankruptcy Reimagined: A Fresh Start for North Macedonia's Debtors)
Consumer Credit Regulation: Financial companies are prohibited from including fees that are not factored into the annual rate of total costs. Fees cannot exceed 60% of the approved loan amount. (Personal Bankruptcy Reimagined: A Fresh Start for North Macedonia's Debtors)
🏛️ Oversight and Administration
Chamber of Bankruptcy Administrators: Established under the updated legislation, this body is supervised by the Ministry of Justice and ensures uniform standards of accountability and competence among bankruptcy practitioners. (An Expert Review of Recent Updates to the Bankruptcy Law)
Administrator Fees: Regulated through by-laws, allowing for greater flexibility and responsiveness to changing circumstances. (An Expert Review of Recent Updates to the Bankruptcy Law)
⚠️ Temporary Measures During State of Emergency
During the COVID-19 pandemic, the government adopted a regulation suspending bankruptcy proceedings: (Regulation by force of law on Bankruptcy Law during a State of Emergency | RSM Macedonia)
Suspension of Proceedings: Prohibited the initiation of bankruptcy procedures and postponed all ongoing cases during the state of emergency and for three months thereafter. (Regulation by force of law on Bankruptcy Law during a State of Emergency | RSM Macedonia)
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