Debt relief: what it is and how it works in the event of bankruptcy

The meaning of the debt relief is that of “release of debts” and refers to the “failed”, as it is a (non-automatic) procedure which, following a bankruptcy procedure leads to the cancellation of those residuals not satisfied.

It was introduced with the DL 5/2006 (modified in 2007 with the DL 1699) and is foreseen in private law, and more precisely by the Bankruptcy Law by article 142 and following. The purpose of the debt relief is to not excessively aggravate the position of the bankrupt who, being in possession of the necessary requirements, may request his cancellation, so as not to have to undergo previous burdens (related to debts that despite the insolvency procedures has not been however it is possible to satisfy) and thus be able to resume economic activity more easily in the near future

Before seeing the requirements and conditions necessary to request the start of the procedure, it is necessary to specify that not all debts can be returned. In particular, those related to the maintenance of the family (as in the case of alimony) and in any case all those that are unrelated to the business activity but contracts for personal reasons are excluded. Those due to offenses, administrative penalties, etc. are also excluded.

 

The necessary requirements

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Those who are individual entrepreneurs or members with unlimited liability can request it. It is also necessary that they have fully cooperated with the authorities involved, have not caused delays of any kind and have not already benefited from them in the 10 years preceding the request. Furthermore, the applicant must not:

  • having violated the provisions of article 48 of the bankruptcy law;
  • have changed the assets or liabilities;
  • to have been convicted of fraudulent bankruptcy or similar offenses;
  • having performed acts aimed at intentionally increasing the economic crisis of its business.

 

How to request it?

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If the requirements are met, it is sufficient to submit the application to the competent court for the insolvency proceedings against him (these must have started but it is not necessary that they have been completely concluded).

The request for access to the debt relief procedure can be made by the bankrupt or even by his heirs. Interested parties can oppose it within 10 days of the ruling of the court (or within and no later than 90 days from the filing date of the sentence in the registry).

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