Best Bankruptcy Lawyers in Romania

About Bankruptcy Law in Romania

Bankruptcy law in Romania primarily provides mechanisms for individuals and companies to reorganize or liquidate their debts under court supervision. The legislation governing bankruptcy includes the Insolvency Law, which offers a framework for addressing financial distress. This legal process is typically dominated by two paths: reorganization, allowing for the business to continue under a restructured plan, and liquidation, where assets are sold off to pay creditors. Romanian bankruptcy proceedings aim to balance the interests of debtors with those of creditors, ensuring an orderly and fair resolution.

Why You May Need a Lawyer

The complexity of bankruptcy proceedings often necessitates professional legal assistance. Common situations where legal help might be required include:

• Understanding the intricate bankruptcy and insolvency laws and how they apply to your specific case.
• Deciding between reorganization or liquidation for a business facing financial distress.
• Negotiating with creditors to reach a debt settlement.
• Representing your interests in court and during creditor meetings.
• Ensuring compliance with all legal requirements and deadlines to avoid potential penalties.

Local Laws Overview

Romania's insolvency legislation has undergone various reforms to align with European Union standards, focusing on transparency, efficiency, and creditor protection. Key aspects include:

• Types of Bankruptcy: Romanian law allows for both voluntary bankruptcy, where the debtor initiates proceedings, and involuntary bankruptcy, where creditors can petition for insolvency.
• Insolvency Threshold: A company is considered insolvent if it fails to pay a debt greater than a specified amount within 60 days from its due date.
• Reorganization Plans: Companies have the possibility to restructure debt under a court-approved reorganization plan, which allows them to continue operations.
• Time Frames: The duration of bankruptcy proceedings can vary, with reorganization lasting several years and liquidation typically concluding within a year.
• Unsecured Creditors: These groups may receive partial payment or none at all, depending on the funds remaining after secured debts are settled.

Frequently Asked Questions

What is the primary law governing bankruptcy in Romania?

The primary law is the Insolvency Law, also known as Law No. 85/2014, which sets the framework for the insolvency proceedings in Romania.

Can individuals file for bankruptcy in Romania?

Yes, individuals can also seek insolvency protection under Romanian law, although this process is more commonly associated with businesses and companies.

What are the eligibility criteria for filing bankruptcy?

Eligibility typically depends on the inability to meet debt obligations over a sustained period. A specific debt threshold and default duration also play a significant role.

How long does bankruptcy stay on a credit record?

In Romania, bankruptcy can remain on a credit record for up to seven years, impacting future creditworthiness and financial dealings.

What happens to personal assets in a business bankruptcy?

In corporate bankruptcy, personal assets are usually protected unless personal guarantees are involved. For sole proprietors, personal assets may be at risk.

What is the difference between secured and unsecured creditors in bankruptcy?

Secured creditors hold claims on specific assets as collateral, while unsecured creditors do not. Secured debts are prioritized in repayment over unsecured debts.

Can bankruptcy be avoided after filing?

Yes, it is possible to retract a bankruptcy filing if sufficient financial arrangements or agreements with creditors are made before proceedings intensify.

What is the role of a trustee in bankruptcy proceedings?

An appointed trustee manages the debtor's estate, oversees asset liquidation or restructuring, and ensures equitable creditor repayment.

Are tax obligations discharged in bankruptcy?

Certain tax debts may be restructured or reduced, but not all tax obligations might be fully discharged through bankruptcy.

How often can a company file for bankruptcy in Romania?

While there is no specific limit, frequent filings would reflect negatively on a business's reputation and may prompt stricter scrutiny from creditors and courts.

Additional Resources

For those seeking more information or assistance regarding bankruptcy in Romania, the following resources may be useful:

• National Trade Register Office - for company registration and insolvency data.
• Romanian Ministry of Justice - for legal resources and updates on insolvency law reforms.
• Chambers of Commerce - for business consultancy services.
• Local Bar Associations - for finding qualified legal professionals specialized in insolvency and bankruptcy.

Next Steps

If you require legal assistance in bankruptcy, consider the following steps:

• Consult with a licensed insolvency lawyer for personalized advice and case evaluation.
• Gather all financial documentation, including debts, assets, and income statements, to provide a complete overview to your legal advisor.
• Explore mediation opportunities with creditors to negotiate payment plans or settlements before proceeding to court.
• Attend informational workshops or seminars organized by legal associations to better understand bankruptcy procedures and rights.
• Assess potential long-term impacts on your credit and financial future with a qualified financial advisor to make informed decisions.