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About Bankruptcy & Debt Law in Marijampolė, Republic of Lithuania

Bankruptcy and debt matters in Marijampolė are governed by national law that applies uniformly across the Republic of Lithuania, with local courts, bailiffs, and insolvency administrators handling cases in the Marijampolė area. Individuals can seek personal bankruptcy if they are insolvent and meet legal good faith standards. Businesses can pursue restructuring to restore viability or enter bankruptcy if rescue is not feasible. Before any insolvency case, creditors typically use civil court procedures and bailiffs to enforce judgments through wage garnishment, bank account seizure, and asset sale. Once an insolvency process is opened, a legal stay can pause most enforcement, and an appointed insolvency administrator manages claims, assets, and distributions to creditors.

Why You May Need a Lawyer

You may need a lawyer if you are receiving debt collection letters, facing enforcement by a bailiff in Marijampolė, or experiencing wage or account seizures. A lawyer can help you verify debts, challenge unlawful interest or fees, negotiate payment schedules, and request suspension of enforcement where the law allows. If you are an individual considering bankruptcy, legal counsel can assess eligibility, prepare filings, propose a payment plan, and protect exempt assets. If you own or manage a company in Marijampolė and are struggling with cash flow, a lawyer can advise on early warning signs, restructuring options, director duties, and filing obligations to avoid personal liability. Legal help is also important for disputes over mortgages and secured debts, guarantor and surety issues, cross border claims within the European Union, and settlement agreements that could have long term consequences.

Local Laws Overview

Key legislation includes the Civil Code of the Republic of Lithuania and the Code of Civil Procedure, which govern contracts, interest, limitation periods, and civil claims. The Law on Insolvency of Legal Entities covers corporate restructuring and bankruptcy. The Law on Bankruptcy of Natural Persons regulates individual bankruptcy, including conditions to apply, repayment plans, creditor rights, and discharge of remaining eligible debts after successful completion. The Law on Bailiffs and related enforcement rules govern how judgments are executed by judicial officers, including garnishment and seizure procedures. Consumer debts are also affected by the Law on Consumer Credit, unfair practices rules, and data protection requirements.

Debt collection typically starts with a demand and may proceed to court for a payment order or full lawsuit. Once a court decision is final, a bailiff can enforce it by contacting your employer and bank, registering attachments on property, and arranging auctions. Some income and essential property are protected from seizure, and a portion of wages is non garnishable, with larger protections for debtors with dependents. If an insolvency case is opened, most enforcement actions are stayed and creditors must file claims within deadlines set by the court or administrator.

For individuals, the court assesses insolvency and good faith. If admitted, an administrator is appointed and a repayment plan is set for a defined period. After completing the plan, remaining eligible debts may be discharged. Certain obligations typically cannot be discharged, such as child support, some fines, and claims arising from intentional wrongdoing. For companies, the law provides restructuring as a rescue tool to continue operations under a plan approved by creditors and supervised by the court and an administrator. If rescue is not viable, bankruptcy leads to liquidation and distribution of proceeds in a statutory order, with secured creditors having priority from collateral.

Directors have duties to act when the company becomes insolvent. Failure to file in time or increasing creditor losses through wrongful trading may create personal liability. Limitation periods apply to debt claims. The general limitation period is long, while shorter special periods apply to certain debts like periodic service charges and interest. Cross border matters within the European Union are affected by EU rules on jurisdiction and recognition of insolvency proceedings.

Frequently Asked Questions

What is the difference between debt enforcement, restructuring, and bankruptcy in Lithuania

Debt enforcement is the process where a creditor uses a bailiff to collect on a court judgment through measures like wage garnishment and asset seizure. Restructuring is a court supervised rescue process for businesses that aims to restore solvency and continue operations under a plan. Bankruptcy is a formal insolvency proceeding that typically ends with liquidation for companies and with a repayment plan and potential discharge for individuals.

Who handles debt enforcement in Marijampolė

Judicial officers known as bailiffs carry out enforcement based on court orders. They can contact employers, banks, and registries, and may seize or sell assets. Their activities are governed by national law and supervised by professional and governmental bodies. You have rights to request information, propose payment schedules, and challenge unlawful measures.

Can I stop wage garnishment or a bank account freeze

In some situations, yes. Opening of an insolvency case often creates a legal stay that pauses most enforcement. You can also negotiate a payment plan with the bailiff, or ask the court to review proportionality. Part of your wages and certain benefits are protected by law and cannot be seized. A lawyer can quickly assess your options and file the necessary requests.

How does personal bankruptcy work for individuals

If you are insolvent and meet good faith criteria, you can apply to the court. If the case is opened, an administrator is appointed, creditors file claims, and a repayment plan is approved for a set period. After fulfilling the plan, the court may discharge remaining eligible debts. Not all debts are dischargeable, and you must cooperate fully and provide truthful information.

Which debts cannot be discharged in personal bankruptcy

Common examples of non dischargeable debts include child support and maintenance, certain fines and penalties, and claims arising from intentional wrongful acts. Secured debts like mortgages are treated specially because the creditor has collateral rights. The exact list and treatment depend on the law and the court order, so obtain legal advice before filing.

What duties do company directors have if the business becomes insolvent

Directors must monitor solvency, avoid actions that worsen creditor positions, and act without undue delay to initiate restructuring or bankruptcy when required. Failure to act or causing additional losses can lead to personal liability. Directors should document decisions, seek early advice, and communicate transparently with stakeholders.

How are secured debts like mortgages treated

Secured creditors have priority to be paid from the proceeds of the collateral. In restructuring, collateral enforcement may be paused while a plan is negotiated. In bankruptcy, the collateral is usually sold and the secured creditor is paid first from the sale proceeds. Any remaining shortfall becomes an unsecured claim unless otherwise agreed.

Do I have to attend court in person in Marijampolė

Many filings and communications can be handled electronically through the national e court system. Personal attendance may be required for specific hearings or creditor meetings, but it is often possible for a lawyer to represent you. For local matters, hearings are scheduled at the competent court based on your domicile or the company seat.

How do creditors file claims in an insolvency case

Once the court opens a case, a deadline is set for creditors to submit claims to the administrator with supporting documents. The administrator verifies claims and prepares a list. Disputed claims can be challenged. Missing the deadline can reduce a creditor's priority or affect voting rights, so timelines are important.

What if I have debts in other EU countries

EU rules coordinate jurisdiction and recognition of insolvency proceedings across member states. Generally, the main proceeding is opened where your center of main interests is located. Lithuanian insolvency decisions are typically recognized in other EU countries, allowing administrators to address assets and claims across borders.

Additional Resources

Courts in the Marijampolė area handle local civil and insolvency matters, while regional courts handle many corporate insolvency cases. The Authority of Audit, Accounting, Property Valuation and Insolvency Management oversees licensing and supervision of insolvency administrators and provides public information on administrators and procedures. The State Enterprise Centre of Registers maintains the Register of Legal Entities and property registers used in enforcement and insolvency. The Chamber of Bailiffs and local bailiff offices can provide information about enforcement actions and payment arrangements. The Bank of Lithuania provides out of court dispute resolution for consumer credit and other financial services. The State Consumer Rights Protection Authority handles consumer disputes and unfair practices. The State Tax Inspectorate and the State Social Insurance Fund Board manage public debts that often arise in insolvency. Local municipal legal aid offices can assist eligible residents of Marijampolė with primary legal advice.

Next Steps

If you need legal assistance, start by gathering key documents such as identification, contracts and loan agreements, recent bank statements and payslips, court or bailiff notices, mortgage and collateral documents, tax and social insurance letters, and any correspondence with creditors. Prepare a list of all debts with amounts, dates, and contact details, and a list of assets and monthly expenses. Do not ignore deadlines, as missing a court or administrator deadline can limit your rights.

Contact a lawyer who handles bankruptcy and debt in Marijampolė. Ask for an initial consultation to assess solvency, risks, and options such as negotiation, payment plans, restructuring, or bankruptcy. If enforcement is ongoing, ask about urgent steps to protect wages and essential assets. If you manage a company, discuss director duties, early restructuring, and filing thresholds. Avoid making preferential payments to selected creditors before receiving advice, as these can be challenged in insolvency. Keep written records of all communications and keep your contact information updated with the court, bailiff, and creditors. Acting early improves outcomes and can preserve more options for you or your business.

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Disclaimer:
The information provided on this page is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and relevance of the content, legal information may change over time, and interpretations of the law can vary. You should always consult with a qualified legal professional for advice specific to your situation. We disclaim all liability for actions taken or not taken based on the content of this page. If you believe any information is incorrect or outdated, please contact us, and we will review and update it where appropriate.