Insolvency: a new opinion of the Ministry of Justice


The website of the Ministry of Justice released a statement which shows that even when filing for insolvency you must continue to make deductions from wages and deposit them until a decision about resolving the insolvency has been reached. Support for this statement can also be found in the explanatory memorandum to the latest amendment to the Insolvency Act (Act 294/2013), which says: “We cannot accept the interpretation that after the initiation of insolvency proceedings and before the judgment on the method of solution of the bankruptcy the debtor as a person is entitled to claim the release of blocked funds in the account in favour of granting the execution that has not yet ended.”


Also, our knowledge from the practice is connected with this fact – it shows that in some cases the debtor seeks to avoid paying the execution by repeatedly administering a bankruptcy petition. The purpose of insolvency proceedings is not to allow the debtor to dispose of the funds that are subject to execution. For the borrower, this means only that it is entitled to the funds of not one particular creditor, but to the funds of all creditors.


The Ministry of Justice believes, and we concur, that these proceedings will be respected by all borrowers and that they shall not seek payment of the entire income.


Author: Gabriela Černá

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