Fines of a bankrupt person can be written off to the state only in accordance with the rules in force at the time the bankruptcy case was filed, the Constitutional Court announced on Wednesday.
According to the CT, the provision of the Law on Bankruptcy of Natural Persons, which entered into force in June 2021, does not conflict with the main law of the country, that the bankrupt’s debts to the state cannot be written off when compensation for damage caused by a criminal act and for violations of other laws is demanded.
However, the CT stated that this provision cannot be applied to bankruptcies of natural persons that have been initiated and not completed before its entry into force.
“Requiring compliance with rules (…) that the natural person could not have known at the time of initiating the bankruptcy process, assumptions were made to negate the natural person’s expectation formed at the start of the bankruptcy process that (…) after the completion of the natural person’s bankruptcy process, only those debt obligations that this was the case at the time of filing the bankruptcy case of a natural person”, says KT.
The Supreme Court of Lithuania (LAT) submitted a request to investigate compliance with the provisions of the Law on Bankruptcy of Natural Persons.
According to LAT, the law does not clearly establish for which laws the fines imposed on a natural person are not written off after the completion of his bankruptcy proceedings.
According to the Constitutional Court, in the case under consideration by the LAT, the question arose as to whether the provision of the law is applicable to a natural person when deciding on the completion of his bankruptcy case, that the remaining unsatisfied claims provided for in the plan for satisfying his creditors’ claims and restoring his solvency are written off, with the exception of fines to the state imposed for violations of other laws.
Tags: Constitutional Court announced bankrupts fines written
