How to restructure debt to Social Security
An entrepreneur who is indebted to the Social Insurance Institution (ZUS) can either start a restructuring procedure under the restructuring law or take advantage of an installment arrangement.
The possibility of restructuring debts owed to Social Security was included in the restructuring procedure on December 1, 2021. Previously, a debtor had to negotiate separately with Social Security for repayment of arrears under an installment arrangement. Today, he has two options to choose from. He can either start the restructuring procedure under the restructuring law or use the installment arrangement.
With that said, the installment arrangement will be more advantageous when the debtor has a problem paying only contributions. Restructuring proceedings, on the other hand, are intended to protect the entrepreneur from bankruptcy. If claims to Social Security are included in this process, they will become part of the proceedings to resolve the debtor’s financial problems. This will allow a comprehensive assessment of the debtor’s situation and a better selection of remedies.
However, it should also be remembered that the restructuring of debts to the Social Insurance Institution is carried out under slightly different rules than the restructuring of debts that are not related to debts to the State. Social Security contributions are paid monthly. If restructuring proceedings are opened during the month, some of the receivables may arise before this happens. Then you have to proportionally divide the receivables into those that arose before the opening of the restructuring and those that arose after the opening of the restructuring.
In addition, an entrepreneur who is indebted to the Social Security Administration as part of the submission of composition proposals can only apply for the payment of his arrears in installments or deferment. They cannot be written off.
