The number of creditors and bankruptcy

The number of creditors and bankruptcy

More and more entrepreneurs are aware of their obligation to file for bankruptcy. When submitting the application, they consider whether they have met all the conditions for filing it, and whether the court will declare bankruptcy based on them. One such factor is the number of creditors.

Filing for bankruptcy

Every entrepreneur who becomes insolvent is required to file for bankruptcy within 30 days from the date of the insolvency. Insolvency – in accordance with the so-called a liquidity premise1 – this is the loss of the ability to meet its due and payable monetary obligations. It can therefore be presumed that the entrepreneur should file the application when he has due debts to one creditor or to many creditors.

The provisions of the bankruptcy law only indicate when the entrepreneur is to submit the application, by what date, what persons are authorized to file it and what information or documents he should submit. However, there is no information whether the application should also be submitted in the event of indebtedness only towards one creditor. A ruling of the Supreme Court may be helpful in this respect, indicating that the state of insolvency occurs in the event of the loss of the ability to execute due pecuniary claims of at least one of the creditors (judgment of the Supreme Court of 19/03/2019, III UK 85/18, LEX No. 2642120).

Declaration of bankruptcy by the court

Contrary to an entrepreneur, a bankruptcy court, when considering a petition for bankruptcy, is obliged to verify more circumstances than just the insolvency itself. The court is obliged, inter alia, to to verify whether the debtor has many creditors, whether the debts are not disputed, or whether he has sufficient property to cover the costs of the proceedings after the declaration of bankruptcy.

When declaring bankruptcy, the court must take into account whether the debtor is in debt to multiple creditors. Bankruptcy proceedings are universal enforcement, i.e. proceedings that are to satisfy the claims of all creditors, not just one creditor. Each individual creditor may pursue its claims independently in the course of enforcement proceedings.

One creditor

When verifying the grounds for filing a bankruptcy petition, an entrepreneur must be aware that the grounds for filing a petition are one thing and the grounds for bankruptcy are another. The law provides for cases where a petition for a declaration of bankruptcy is dismissed despite the debtor’s undoubted insolvency (e.g. Art. 13 (1) of the BRL). Such a case – despite the lack of direct regulations in the regulations – is a situation where the entrepreneur has only one creditor. A debtor with one creditor is therefore obliged to file for bankruptcy – in order to protect the management board from liability – even if such a petition was to be dismissed by the court, due to failure to meet the condition of multiple creditors.


1 In addition to the liquidity premise, the regulations also provide for the so-called balance sheet premise relating to legal persons. Due to the subject of the article, it is beyond the scope of the analysis.

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