Bankruptcy filing will be temporarily suspended

A legislative bill is being prepared that suspends the company's obligation and the creditor's right to file for bankruptcy during an emergency period and within two months after its termination.

The purpose of the bill is to ensure that companies that become insolvent due to the ongoing crisis have the opportunity to adapt to the situation and take the necessary measures to restore. Those are the cases when it is reasonable to expect that the company will be able to continue its business activities in the future.

The bill, however, does not limit debtors who wish to file for bankruptcy on their own initiative.

During this period, the courts will refuse to accept bankruptcy claims from creditors. The exception is cases when a bankruptcy petition is filed by an employee who is not covered by employment benefits established by the government during an emergency period.

Currently, the company board must file a bankruptcy petition within 20 days from the date of insolvency. The bill suspends this obligation for a period of emergency and two months after the period of emergency has been suspended.

Individuals do not have obligations to file for personal bankruptcy. However, the bill also prohibits lenders from filing for bankruptcy of individuals.

The bill is being prepared by the Estonian Ministry of Justice.