The Insolvency Department was established on January 1st 2020 and constitutes an important reform for both the public service and the economy in general. The duties and responsibilities of Official Receiver were previously under the Department of Registrar of Companies and Official Receiver.
The new Department was established to give a second chance to individuals and viable businesses in financial difficulty, thus avoiding bankruptcy and liquidation. Its main goal is to support and maintain a robust economy.
Under the Legal and Regulatory Insolvency Regime, the following are accomplished:
- the revival and second chance culture, as opposed to bankruptcy and liquidation.
- the enactment of a mechanism for the restructuring of corporate debts, with the aim of rescuing and restoring business activity and restructuring and sustaining viable corporations.
- the viability of natural and legal persons by offering them the tools to restructure their debts.
- obtaining Court Orders for debtors that have no disposable income nor any substantial assets to sell for the repayment of their debts, so that they are relieved from the aggregate of their unsecured debts up to the amount of €25.000. The same debt relief shall apply to all of their guarantors.
- a more favourable treatment of guarantors.
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