To the surprise of many businessmen, the rules on bankruptcy are rather severe in Poland.
The law says that bankruptcy should be declared when the debtor became insolvent. This provision seems to be of an usual nature but when we have a look at the definition of insolvency, we would find that the debtor is considered to be insolvent when it does not fulfill due pecuniary obligations. Additionally, when we talk about companies, they are treated to be insolvent when their debts are higher than the value of their assets, even if a company fulfills its obligations. A conclusion – no matter how high are your debts, when you stopped paying, consider applying for bankruptcy. Only the court may overrule the petition for bankruptcy in case when the delay in paying debts is smaller than 3 months and the sum of the debts does not exceed 10% of the balance sheet value of the enterprise of the debtor unless this situation seems to be of a permanent character or it may cause damage to creditors. The debtor himself cannot decide that the debts are too small and irrelevant. Therefore even if there is a practice on the market that companies pay with delay, remember about the risk of bankruptcy petition from the creditors.
If you are a debtor, remember that you must apply for the bankruptcy within 2 weeks term from the day the insolvency occurred. Otherwise the Members of the Management Board (in case of a ltd) are under a risk of personal responsibility for company’s debts, not to mention criminal provisions.
attorney al law