Lithuania - Government Approved the Concept of the Law on the Bankruptcy of Natural Persons

The first Draft Law on the Bankruptcy of Natural Persons was submitted to the Parliament almost a year ago. However, the suggested draft law was not approved by the Parliament. Ever since, there have been ongoing debates on whether the institute of bankruptcy of natural persons should be introduced into the Lithuanian law.

As of 7 April 2010, the Ministry of Economy of the Republic of Lithuania officially made way for the preparation of a new law regarding the bankruptcy of natural persons. The law will aim at protecting natural persons, including farmers, facing serious financial problems from poverty and at restoring their solvency. The concept of the draft law establishes that the main aim of the law will be to scrutinize the bankruptcy procedures of natural persons (including persons who may initiate bankruptcy proceedings, conditions for bankruptcy proceedings in court and out of court, principle of publicity and etc.), time limits to settle with the creditors, conditions for the dismissal of debts, and related issues.

The law would apply to natural persons residing or having their main assets in Lithuania. The Ministry of Economy also suggests that the law would be applied not only to persons with longstanding financial liabilities, but also to persons with recent debts.

Raidla Lejins & Norcous