Personal bankruptcy has been introduced for the very firstvery first time in Montenegro. The Personal Bankruptcy Act entered force on 22 August 2015.
The brand-new law applies to customers. Customer is defined as an individual getting inbecoming part of an industrial transaction outside his/her industrial or professional activity. Subsequently, an individual acting in his/her capability of private entrepreneur or professional is not covered by the definition of consumer. However, personal bankruptcy may be started over a private business owner or an artisan who: (i) has no more than 10 creditors, (ii) has a financial obligation that does not exceed EUR 15,000, (iii) has no commitments to its staff members, if any, and (iv) is not currently subject to routine insolvency procedures as a business entity.
Personal bankruptcy proceedings can be submitteddeclared if the customer is insolvent, by the customer himself/herself or by a creditor. The consumer is considered to be insolvent in case he/she (i) has been in hold-up with the fulfilment of several payment responsibilities for a period of more than 6 months, which obligations in total go beyond seven times the quantity of the customers wage or other frequently gotten income, or (ii) is jobless for more than five months and his/her past due payment commitments go beyond EUR 2,500.
Personal bankruptcy proceedings include three stages: out-of-court settlement, in-court settlement phase and bankruptcy.
A 60-day out-of-court negotiation period is a compulsory condition to declare customers individual bankruptcy. This stage, taking placehappening before a mediator, can be extended for another Thirty Days. The consumer is obliged to make a plana prepare for debt settlement and a list of possessions. The list of assets includes all existing assets, earnings and liabilities of the customer, a list of lenders, a list of claims, anticipated earnings and expected inheritance. Any out-of-court settlement requires consent of and should incorporate all lenders otherwise it is null and space. If out-of-court settlement is licensed before a notary, it represents a directly enforceable instrument.
If out-of-court negotiation yields no settlement with lenders, the customer or any lender can petition the court to proclaim the consumer broke. If the customer files for personal bankruptcy, it needs to submit to the court a financial obligation settlement plan.
Treatment for individual bankruptcy is immediate. Nevertheless, phase 2 may be suspended for a period of three months pending settlements between the debtor and its creditors. At the initial hearing, the financial obligation settlement plan, if any, is considered and put to vote by the creditors. Lenders whose claims are not included in the financial obligation settlement plan might register their claims within 30 days from the statement of the initial hearing. If the financial obligation settlement strategy is accepted, the petition for the opening of bankruptcy procedures is considered to be withdrawn. Debt settlement strategy should be accepted by all creditors. Lenders that do not oppose the strategy within the statutory due date are considered to have actually accepted the plan. If the bulkmost of creditors support the strategy, the court might enact a decision changing … read more