The government is planning to relieve traders of their debts three years after declaring bankruptcy. This, along with the introduction of insolvency administrators who will undertake the management and resolution of bankrupt companies’ assets, will form part of the reform of the bankruptcy law for corporations that is currently being drawn up.
The write-off of traders’ debts three years after going bankrupt forms part of the country’s commitments to its creditors and will apply to those who have declared bankruptcy since January 1, 2016. Sources say the government may also extend the measure to those who went bust before that date, too, in an effort to improve business sentiment and offer a second chance to those who previously failed in their business activities.
The changes to the bankruptcy law will be combined with legislation dating from 2014 regarding the settlement of the bad loans of small and medium-sized enterprises, whose debts have reached 20 billion euros. Total nonperforming business loans exceed 60 billion euros.
The necessity of the new regulation is indisputable given that the bankruptcy process currently constitutes a long and arduous process for trade professionals that effectively prohibits them from returning to business.