Any natural person who has encountered financial difficulties and who has been a taxpayer of the Republic of Latvia for the last 6 months may ask the court to initiate insolvency proceedings for the natural person in order to free himself from unfulfilled obligations and restore his solvency.
Signs of insolvency of an individual are:
- the debtor is unable to redeem debt obligations that have already become due and the total amount of such debt obligations exceeds 5,000 euros;
- according to provable circumstances, the debtor is unable to redeem debt obligations that are due within a year, and the total amount of such debt obligations exceeds 10,000 euros.
A prerequisite for applying the insolvency process for a natural person is that the debtor has funds to pay a one-time fee to the administrator in the amount of two minimum salaries.
The insolvency process of a natural process begins from the day when the court, by its decision, declared the insolvency process, and lasts until the day the court makes a decision to terminate the insolvency process.
The beginning of the insolvency process is preceded by the collection of information and documents confirming both the existence of unfulfilled obligations to creditors and and the fact that the debtor does not have property and income sufficient to redeem debts to creditors.
Immediately after the court makes a decision to begin the insolvency process, the debtor receives obvious advantages:
- the execution of any decisions of the court and other authorities on the collection of debts and forced fulfillment of obligations is suspended;
- the accrual of any interest, fines, penalties is suspended, including the accrual of fines for late payment of taxes;
- creditors lose the right to demand the immediate sale of the debtor’s property;
- creditors and collection companies stop causing inconvenience to the debtor with their reminders and demands.
The main responsibility of the debtor in the insolvency process is to receive income commensurate with his capabilities, cooperate with the insolvency administrator, provide reliable information about his income and property, as well as draw up and consistently implement a repayment plan.
Depending on the level of income of the debtor and the total amount of unfulfilled obligations, a repayment plan is drawn up for a period of 6 months to 3 years.
After the debtor has successfully completed the repayment plan, the court issues a ruling to terminate the insolvency process and release the debtor from the remaining obligations, with the exception of those that cannot be released (for example, obligations to pay alimony, administrative fines, compensation for losses, etc.).
Law office Inlatplus, having wide experience in solving such cases, is ready to provide appropriate legal assistance to any natural person who has signs of insolvency and wants to free himself from remaining debt obligations.
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