Lawyer, Head of Judicial Practice of NOBILI Law Firm Meshe Oleksiy

When not to rush an individual with bankruptcy?

Upon filing an insolvency application, an individual must submit special declarations of property status in the insolvency case for the 3 years preceding the bankruptcy.
Therefore, if a natural person has made certain transactions 3 years before the bankruptcy, then such bankruptcy may be harmful.
Such transactions may include:
– sale of valuables in which there were payments in cash or otherwise;
– sale of real estate or other assets, the price of which is lower than the market price;
– exchange of assets on unfavorable terms for the debtor;
– obtaining loans for personal purposes, which are mainly aimed at creating debt and obtaining grounds for bankruptcy.
– agreements with relatives that are illogical or economically incomprehensible;
– agreements with relatives for the sale of assets (apartment, house, car) with the subsequent severance of family relations (divorce).
In the bankruptcy proceedings of an individual, such transactions will be fairly closely considered and analyzed by the court and the trustee. And if it becomes clear that such transactions were aimed at increasing debt, creating conditions for bankruptcy in order to avoid paying debts, then an individual may have significant problems, and such agreements may be declared invalid.
In such situations, we suggest waiting for a period of 3 years, or even more. But if the issue of bankruptcy is quite acute, we advise you to turn to specialists who will analyze the whole situation, documents, financial condition and prepare a full analysis of the insolvency of the individual for the prospect of filing for insolvency