Effects of insolvency proceedings

The effects of opening insolvency proceedings arise when the notice of the opening of the proceedings is published in the insolvency register.

The effects of opening insolvency proceedings arise when the notice of the opening of insolvency proceedings is published in the insolvency register. These effects last until the end of the insolvency proceedings, unless the law provides otherwise for any of the insolvency methods.

The following effects are associated with the opening of insolvency proceedings: (1) claims and other rights related to the estate cannot be invoked by bringing an action if they can be invoked by registration; (2) the right to satisfaction from collateral related to assets owned by the debtor or assets belonging to the estate may be exercised and newly acquired only under the conditions set out in the Insolvency Act. This also applies to the establishment of a judicial or executor’s lien on immovable property proposed after the opening of insolvency proceedings; (3) enforcement or execution affecting assets owned by the debtor, as well as other assets belonging to the estate, may be ordered or initiated, but cannot be implemented. For claims on the estate and claims of equivalent status, however, enforcement or execution affecting assets belonging to the debtor’s estate may be implemented on the basis of a decision by the insolvency court, subject to the restrictions established by that decision; (4) it is not possible to exercise a right, established by agreement between a creditor and the debtor, to garnishment in respect of wages or other income treated as wages or income in the enforcement of a decision.

Insolvency decisions interrupt judicial and arbitration proceedings concerning claims and other rights relating to the estate that are to be invoked by registration in insolvency proceedings, or that are viewed as registered in insolvency proceedings, or concerning claims that are not satisfied in insolvency proceedings. Unless otherwise provided, it is impossible to continue these proceedings while an insolvency decision remains in effect.

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