Bankrupt in Lithuania
Regulation of the European Council N 1346/2000 dated 29 of March, 2000 regarding bankruptcy made a provision for rights of bankrupt individuals. This regulation allows citizens of the EU to file for bankruptcy within the EU (i.e. citizen of Lithuania can be made bankrupt in that EU country where his main valuable interests are.
So far Lithuanian citizen can be made bankrupt in Latvia and in the United Kingdom also, where bankrupt individuals practice is well established already.
Bankrupt individuals’ opportunities
According to the Law, only the person whose debts are more than 25 minimum monthly wages can initiate bankruptcy procedure (that is 25000 LT). Applying bankruptcy procedure creates an opportunity for the debtor to repay debts within 5 years, and then he can start his full life with no problems. This Law is especially favorable by people who are unable to repay debts soon or by people whose debts are so big that entire life will not be enough to repay them. It is very important that after bankruptcy initiation actions freedom is highly restricted, especially regarding debtor’s assets. Since initiation of bankruptcy proceedings, the administrator of bankrupt manages all debtor’s assets. Debtor is not allowed to manage his assets, with an exception stated by Law of Bankrupt Individual.
Advantages and disadvantages of Bankrupt Individuals
Before the Regulation regarding bankrupt individual was adopted, a considerable number of Lithuanian citizens emigrated from Lithuania, because debt issues were beyond their strength and an alternative to save their assets and themselves did not exist. Opportunity to create creditworthiness of individuals, so that they do not have to leave their country, is unquestionable advantage. Disadvantage – restricted opportunity to manage individual’s own assets and earnings.
Legal advice regarding individual insolvency
Our solicitors are specialized in representation of individuals in case of insolvency. Our solicitors have closed 120 cases in Lithuanian courts before the end of 2010, in 2011 – 430 cases. More than 1000 individuals have already used our services. We helped them to initiate and finish bankruptcy proceedings when there was no hope to solve all the problems through negotiations.