aA
After Lithuania legalized bankruptcy procedures for individuals three years ago, only 17 people have made use of the relief from their debts by declaring bankruptcy. Another 900 have started bankruptcy procedures which take three years. Lithuanians who want to go bankrupt faster and easier still prefer to do it in Latvia or the United Kingdom.
Why Lithuanians prefer to go bankrupt abroad
© Shutterstock nuotr.

The Law on Bankruptcy of Physical Individuals, adopted in March 2013, allows individuals in excessive debt to restore their solvency by declaring bankruptcy. New amendments came into force on January 1, cutting the bankruptcy procedure from five years to three.

Before, bankruptcy procedures could last up to five years, irrespectively of the size of a debt. In about 19 cases out of 20, courts would set the term for restoring solvency at the maximum, five years.

"I am glad that Lithuania accepted recommendations from the European Commission and cut the term for individual bankruptcy to three years, just like in our neighbours Poland and Latvia," says bankruptcy consultant Algirdas Radušys. "With the shorter term, excessively indebted individuals will be able to restore their ability to pay and come back to active economic activity faster. It benefits everyone."

The shorter term will encourage more debtors to declare bankruptcy in Lithuania, he adds, but many are likely to continue to go to Latvia or the United Kingdom for that.

Unlike in Lithuania, courts in some other countries can launch bankruptcy procedures without calling a creditors' meeting, the ruling cannot be appealed and comes into effect immediately. Creditors are informed about it by the appointed bankruptcy administrator and all they have to do is specify their claims.

Moreover, Latvia's laws allow finishing bankruptcy procedures within a year, if debts do not exceed €30,000. In the UK, they will last one year, irrespectively of the size of the debt.

Meanwhile in Lithuania, a person can declare bankruptcy if their arrears exceed €8,750. Whatever the actual debt, €9,000 or a million, the procedure will last three years.

|Populiariausi straipsniai ir video

President: Lithuania must defend its haulers' interests 'to the hilt'

Lithuanian President Gitanas Nauseda backs the government's plans to contest the EU Mobility Package...

Lithuanian Airports join international project dedicated to people with hidden disabilities

The national airports operator further pursues the goal to ensure a smooth travelling experience for...

Opera to acquire Lithuanian specialised bank

Opera, headquartered in Oslo, Norway, announced its intention to purchase Fjord Bank subject to...

Tours operators suspend trips to Bulgaria over coronavirus concerns

Lithuania's tour operators Novaturas and Tez Tour have decided not to organize trips to Bulgaria...

First complaint from business over lockdown restrictions reaches court (1)

Lithuanian business representatives on Wednesday lodged a complaint before a court seeking remedy...

Top news

Nauseda: Lithuania will have to go back to financial discipline after corona crisis

Once the coronavirus crisis ends and the economic situation gets back to normal, Lithuania will...

Tours operators suspend trips to Bulgaria over coronavirus concerns

Lithuania's tour operators Novaturas and Tez Tour have decided not to organize trips to Bulgaria...

President: Lithuania must defend its haulers' interests 'to the hilt'

Lithuanian President Gitanas Nauseda backs the government's plans to contest the EU Mobility Package...

Loop traffic has taken effect in Vilnius Old Town

On 7 July, a new order for arranging traffic in Vilnius Old Town took effect – visitors and...

Kaunastic discoveries: music in Kaunas this July

Here’s what the Kaunas calendar has to offer, including cumbia, classical music , urban sounds...

|Maža didelių žinių kaina