A major amendment of the Insolvency Act, which became effective on 1 July 2017, introduced, among others, changes in the area of advance payments regarding the insolvency proceedings costs.
Until recently, it was a common practice that it was the insolvency court which was entitled to decide whether a reserve which would cover possible insolvency proceedings were to be built by advance payment if the means were impossible to be secured in another way including situations when the debtor had no assets.
In accordance with the Insolvency Act, a new obligation for the petitioner to make an advance payment in the amount of CZK 50,000 if an insolvency petition was made by the creditor against a legal entity, which is seen an entrepreneur, or CZK 10,000 in the case of either a non-entrepreneurial legal entity or an individual. The payment is due with the insolvency petition submission. The obligation does not only concern cases of (ex-)employees registering claims based on solely labor-law relations or consumers filing claims arising from contractual obligations.
Starting from July 2017, then, all creditors (except for the cases listed above) are obligated to perform an advance payment related to insolvency proceedings costs. As far as insolvency petitioners - debtors are concerned, the situations remain unchanged: the decision on the obligation to pay the advance is to be taken by the courts with the amount not exceeding CZK 50,000.
