Bankruptcy Legal Services in Romania: Benefits, Tips, and Advice from Romanian Lawyers

Hiring experienced bankruptcy legal services in Romania can provide you with many benefits that can make your bankruptcy process easier, faster, and more effective.

If you are a small to medium sized company owner in Romania, you may be facing some financial challenges due to the economic downturn, the pandemic, or other factors.

You may be struggling to pay your debts, keep your business running, and maintain your reputation. You may be wondering if bankruptcy is an option for you and how it can affect your assets and future prospects.

In this article, we will explain how bankruptcy works in Romania, what are the different types of bankruptcy procedures available, and what are the steps and requirements for filing for bankruptcy.

We will also show you how hiring experienced bankruptcy legal services in Romania can help you protect your assets, negotiate with your creditors, and recover from your financial difficulties.

What are the types of bankruptcy procedures in Romania?

Bankruptcy is a legal process that allows a company that is insolvent or unable to pay its debts to restructure its finances, liquidate its assets, or close its operations.

Bankruptcy can help a company avoid lawsuits, foreclosures, and seizures from its creditors and other parties.

Bankruptcy can also provide a fresh start for a company that wants to continue its business or start a new one.

In Romania, there are three main types of bankruptcy procedures:

• Reorganization: This is a procedure that allows a company to restructure its debts and operations under the supervision of a judicial administrator and a creditors’ committee. The company must submit a reorganization plan that outlines how it will pay its creditors, reduce its costs, and increase its revenues. The plan must be approved by the court and the creditors. The company can continue its business during the reorganization process, but it must follow the terms of the plan and report its progress regularly.

• Liquidation: This is a procedure that involves the sale of the company’s assets to pay off its debts. The company must appoint a liquidator who will manage the liquidation process and distribute the proceeds to the creditors according to their priority. The company must cease its business activities during the liquidation process and dissolve its legal entity after the completion of the process.

• Simplified procedure: This is a procedure that applies to small companies that meet certain criteria, such as having less than 50 employees, less than 10 million lei in assets, or less than 10 million lei in debts. The simplified procedure is faster and cheaper than the regular procedures and involves less court involvement and paperwork. The company can choose between reorganization or liquidation under the simplified procedure.

Each type of bankruptcy procedure has its advantages and disadvantages depending on the situation and goals of the company.

For example, reorganization can allow a company to keep its assets and business relationships, but it can also be more complex and costly than liquidation.

Liquidation can allow a company to get rid of its debts quickly, but it can also result in the loss of its assets and reputation.

Simplified procedure can be more convenient and efficient for small companies, but it can also limit their options and flexibility.

How to choose the best type of bankruptcy procedure for your company?

Choosing the best type of bankruptcy procedure for your company depends on several factors, such as:

• The size and nature of your company
• The amount and type of your debts
• The value and condition of your assets
• The feasibility and profitability of your business plan
• The expectations and preferences of your creditors
• The legal and tax implications of each option

To make an informed decision, you need to evaluate your financial situation carefully and realistically. You also need to consult with an experienced bankruptcy lawyer who can advise you on the pros and cons of each option and help you prepare and submit the necessary documents.

What are the steps and requirements for filing for bankruptcy in Romania?

Filing for bankruptcy in Romania involves several steps and requirements that vary depending on the type of procedure chosen. However, some general steps and requirements are:

• Determining the insolvency condition: A company is considered insolvent if it has stopped paying its debts for more than 60 days or if it has liabilities that exceed its assets. A company can file for bankruptcy voluntarily if it meets these criteria or involuntarily if one or more of its creditors file a bankruptcy petition against it.
• Preparing and submitting the bankruptcy petition: The company or the creditor must prepare and submit a bankruptcy petition to the competent court within 30 days from the occurrence of the insolvency condition. The petition must include various documents and information, such as the financial statements, the list of creditors and debtors, the inventory of assets and liabilities, and the proposed type of bankruptcy procedure.

• Opening the bankruptcy procedure: The court will examine the bankruptcy petition and decide whether to open or reject the bankruptcy procedure within 10 days from receiving it. The court will also appoint a judicial administrator or a liquidator who will oversee the bankruptcy process and represent the interests of the creditors.
• Notifying the parties involved: The court will notify all the parties involved in the bankruptcy process, such as the company, the creditors, the employees, and other stakeholders. The parties will have 15 days to submit their claims or objections to the court or to challenge the appointment of the judicial administrator or liquidator.
• Implementing the bankruptcy plan: Depending on the type of procedure chosen, the company or the judicial administrator will prepare and submit a bankruptcy plan to the court and the creditors within a certain period of time. The plan will specify how the company will pay its debts, restructure its operations, or liquidate its assets. The plan must be approved by the court and a majority of the creditors. The company or the judicial administrator will then execute the plan according to its terms and conditions.
• Closing the bankruptcy procedure: The bankruptcy procedure will end when the company has fulfilled its obligations under the plan, when there are no more assets to be distributed, or when there are no more claims to be settled. The court will issue a decision to close the procedure and discharge the company from its debts. The company will then resume its normal activities or cease to exist.

What are the benefits of hiring experienced bankruptcy legal services in Romania?

Hiring experienced bankruptcy legal services in Romania can provide you with many benefits that can make your bankruptcy process easier, faster, and more effective. Some of these benefits are:

• Professional guidance and representation: Hiring experienced bankruptcy legal services in Romania can provide you with professional guidance and representation throughout your bankruptcy process. They can help you choose the best type of bankruptcy procedure for your situation, prepare and submit all the necessary documents, represent you in court and negotiations, protect your rights and interests, and facilitate the implementation of your bankruptcy plan.
• Negotiation skills and expertise: Hiring experienced bankruptcy legal services in Romania can provide you with negotiation skills and expertise that can help you reach favorable agreements or compromises with your creditors and other parties. They can help you reduce your debts, lower your interest rates, extend your payment terms, or obtain waivers or discounts. They can also help you avoid litigation or arbitration that can be costly.
• Asset protection and recovery: Hiring experienced bankruptcy legal services in Romania can provide you with asset protection and recovery that can help you preserve or recover your valuable assets. They can help you identify and secure your exempt assets, such as your personal belongings, tools of trade, or pension funds, that are not subject to liquidation or seizure. They can also help you recover your assets that have been fraudulently transferred, concealed, or misappropriated by others.
• Business continuity and revival: Hiring experienced bankruptcy legal services in Romania can provide you with business continuity and revival that can help you keep your business running or start a new one. They can help you maintain your business relationships, contracts, licenses, and permits during your bankruptcy process. They can also help you restructure your business operations, improve your cash flow, and increase your profitability. They can also help you access new sources of funding, such as loans, grants, or investors, that can support your business growth and development.