Insolvency

Insolvency is not a failure, but a tool for protection and restructuring. Signs that the time has come:

• Payments to suppliers or bank have stopped and you see no solution
• There are garnishments on accounts blocking operations
• Multiple creditors are simultaneously enforcing
• Turnover constantly declines without reversal in sight
• Debts exceed assets and cannot be negotiated

Insolvency filed in time allows judicial reorganization with a recovery plan — preserving activity, restructuring debts, continuing with new management. Late insolvency usually leads to liquidation.

The BVIR team evaluates the situation and recommends the optimal route based on real figures.

Yes. Law 151/2015 governs the insolvency procedure for individuals (sole proprietors, professionals, but also employees).

Conditions:

• Debts greater than what can be paid from income
• Good faith (no fraud, no avoidable excessive spending)
• Romanian citizen residing in Romania
• Have not benefited from this procedure in the last 5 years

Two forms:

• Repayment plan — over a maximum of 5 years, with an affordable monthly amount
• Liquidation — sale of assets, write-off of remaining balance (with exceptions — alimony, moral damages, criminal fines)

The procedure takes 6-18 months. BVIR assists over-indebted individuals towards a new legal financial chance.

Judicial reorganization is the alternative to liquidation — keeping the company in operation, with a plan approved by creditors and the court, to overcome difficulties.

Stages:

1. Opening of insolvency procedure
2. Preliminary table of claims
3. Reorganization plan proposed (by debtor or creditors) — within 30 days of confirmation
4. Approval of the plan in the Creditors' Meeting (majority by category)
5. Court confirmation
6. Plan implementation — maximum 3 years, extendable to 4

The plan may provide for: partial debt write-off, interest reduction, rescheduling, debt-to-equity conversions, sale of non-core assets. The assistance of an insolvency practitioner is mandatory.

Duration varies based on complexity and form:

• Individual insolvency (Law 151/2015) — 6-18 months
• Simple judicial reorganization — 2-3 years total
• Complex judicial reorganization (with creditor disputes) — 4-7 years
• Bankruptcy and liquidation — 1-3 years from opening

Factors that prolong: many contested claims, hard-to-sell assets (real estate), litigation by the judicial administrator.

A well-conducted procedure with an experienced practitioner can significantly reduce duration and losses.

Employee rights are protected by Law 200/2006 — the Guarantee Fund for payment of salary claims.

In case of insolvency:

• Outstanding salaries are paid from the Guarantee Fund (up to 3 average gross salaries on the economy, cumulated)
• Collective dismissals are possible but with specific procedure
• Employees benefit from unemployment allowance

In reorganization, employment contracts may continue — the judicial administrator manages the relationship with employees. In liquidation, contracts are terminated and employees receive the foreseen compensations.

Unions and employee representatives must be consulted on major decisions.

The judicial administrator is an insolvency practitioner member of UNPIR, appointed by the court, who manages the procedure. Main duties:

• Verifies declared claims and prepares the table
• Manages the debtor's current activity
• Sells assets (in liquidation)
• Distributes amounts to creditors per priorities
• Reports periodically to court and creditors
• Challenges fraudulent acts of the debtor

Key difference:

• Judicial administrator — in reorganization (debtor maintains control under supervision)
• Liquidator — in bankruptcy (takes total control)

The BVIR firm assists clients in their interaction with the judicial administrator and across all procedural stages, before the Bihor Tribunal.

Yes, but under strict rules. You must:

1. File a claim declaration with the judicial administrator — within 60 days of publication of the opening decision
2. Attach supporting documents — contracts, invoices, summons, court judgments
3. Wait for the preliminary table (within 30 days) and final table (after challenges)

The order of payment is strict (statutory priorities):

1. Procedural costs
2. Salaries
3. Secured claims (mortgages)
4. Budget claims (ANAF — National Tax Agency)
5. Unsecured claims

Unsecured claims often recover only 5-30% of value. Preventive securitization (mortgages, personal guarantees) makes the difference.

For an insolvency application (by debtor or creditor) you need:

• Last approved balance sheet + current trial balance
• List of claims — debtor, amount, due date, possible disputes
• List of assets — real estate, movable, accounts, claims to be collected
• Articles of incorporation
• General Meeting decision for opening insolvency (for SRL/SA — Romanian LLC/JSC)
• List of employees and outstanding salaries
• ANAF (National Tax Agency) reports or other tax authorities

The documentation must demonstrate the state of insolvency — inability to pay due debts with available funds (over 60 days).

Yes. One major consequence of opening the insolvency procedure is the automatic suspension of all individual forced executions against the debtor.

This "shield" provides:

• Stopping garnishments on accounts
• Blocking seizures on real estate
• Pause in auction sales
• Concentration of executions in a single procedure

Important: insolvency cannot be used as a delay tactic. The court verifies good faith and the actual existence of insolvency. "Bad-faith" applications are rejected with sanctions.

The strategy must be evaluated professionally — sometimes direct negotiation with the creditor is more useful.

The procedure involves several categories of costs, usually borne by the debtor's patrimony or the creditor initiating the procedure:

• Stamp duty and advance for the judicial administrator's fee — deposited at opening
• Judicial administrator/liquidator fee — fixed or percentage of the credit pool, per UNPIR regulations
• Operational costs — expert reports, asset valuations, Official Gazette announcements
• Lawyer's fee representing debtor or creditor

For individual insolvency (Law 151/2015), the procedure is simplified — stamp duty is reduced and the judicial administrator's fee is statutorily capped.

For an evaluation tailored to your case, schedule an initial consultation.