Insolvency Law at Slovakia
Slovakia's insolvency framework is primarily governed by Act No. 7/2005 Coll. on Bankruptcy and Restructuring, as amended, and the Insolvency Act (Zákon o konkurze a reštrukturalizácii). In July 2022, Act No. 111/2022 Coll. introduced significant reforms to enhance preventive restructuring and streamline insolvency procedures. These reforms align with the EU Directive 2019/1023 on preventive restructuring frameworks and the discharge of debt. (Restructuring and insolvency law in Slovakia | CMS Expert Guides, Legal Alert | Preventive restructuring and other changes in insolvency law, Digitalisation of Insolvency proceedings in Slovakia - European Commission)
🏛️ Legal Framework
Primary Legislation: Act No. 7/2005 Coll. on Bankruptcy and Restructuring
Key Amendments: Act No. 111/2022 Coll.
EU Alignment: Directive 2019/1023
⚖️ Types of Insolvency Procedures
1. Preventive Restructuring
Designed for debtors at risk of insolvency, this procedure offers two pathways: (New Act No. 111/2022 Coll. on the resolution of imminent bankruptcy | LEXANTE)
Public Preventive Restructuring: Initiated by the debtor, it provides temporary protection from creditors for up to six months. A court-appointed administrator oversees the process.
Non-Public Preventive Restructuring: Available for debtors with creditors under the supervision of the National Bank of Slovakia. It requires court notification and submission of a restructuring plan within three months. (Restructuring and insolvency law in Slovakia | CMS Expert Guides)
Both procedures aim to restructure debts and avoid bankruptcy. (Legal Alert | Preventive restructuring and other changes in insolvency law)
2. Bankruptcy (Konkurz)
Initiated when a debtor is insolvent, bankruptcy involves:
Filing a Petition: Debtors must file within 30 days of becoming aware of their insolvency. Failure to do so can result in fines up to €12,500. (New Act No. 111/2022 Coll. on the resolution of imminent bankruptcy | LEXANTE)
Court Proceedings: The court examines the petition and appoints an insolvency administrator.
Asset Liquidation: Assets are sold to satisfy creditor claims. (Restructuring and insolvency law in Slovakia | CMS Expert Guides)
Debt Discharge: Individuals may be discharged from remaining debts after fulfilling obligations.
This procedure is aimed at liquidating the debtor's assets to satisfy creditors.
🧾 Key Reforms Under Act No. 111/2022 Coll.
Imminent Bankruptcy Definition: A debtor is considered at risk of insolvency if it is reasonably foreseeable that they will become insolvent within 12 months. (New Act No. 111/2022 Coll. on the resolution of imminent bankruptcy | LEXANTE)
Presumption of Insolvency: Introduced a presumption of insolvency, allowing debtors to prove solvency within 60 days.
Filing Obligations: Reinstated the obligation for debtors to file for bankruptcy within 30 days of becoming aware of insolvency.
Payment Restrictions: Prohibited debtors from fulfilling claims beyond what would be satisfied in bankruptcy. (New Act No. 111/2022 Coll. on the resolution of imminent bankruptcy | LEXANTE)
Preventive Proceedings: Introduced public and non-public preventive restructuring procedures to address impending insolvency. (Legal Alert | Preventive restructuring and other changes in insolvency law)
💻 Digitalisation of Insolvency Procedures
The European Commission supports Slovakia in digitalising insolvency proceedings to enhance efficiency and transparency. The initiative includes: (Digitalisation of Insolvency proceedings in Slovakia - European Commission)
Electronic Filing: Implementation of electronic filing for insolvency petitions and creditor claims. (Legal Alert | Preventive restructuring and other changes in insolvency law)
Digital Case Management: Development of a digital system for managing insolvency cases. (Digitalisation of Insolvency proceedings in Slovakia - European Commission)
Capacity Building: Training for stakeholders on digital tools and procedures.
These efforts aim to reduce costs and improve the business environment by ensuring faster and more transparent insolvency processes. (Digitalisation of Insolvency proceedings in Slovakia - European Commission)
🏢 Specialised Insolvency Administrators
To handle complex insolvency cases, Slovakia has introduced a certification system for insolvency administrators. Only those who have passed a specialized exam and operate in a certified office can manage large or complex cases. Currently, there are five certified administrators, with plans to increase this number to at least ten. (Slovakia: Dawn of a New Era for Insolvency Proceedings?)
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