creditor protection | In Principle

Seeking to evade their obligations, debtors may take various actions in connection with their possible right to inheritance from a third party. A debtor might attempt to conceal the elements or value of the estate. They might even reject the inheritance before the court or a notary, but the creditor is not defenceless in that situation. The purpose of this article is to introduce readers to a legal instrument protecting the creditors’ interests in a situation where the debtor rejects an inheritance.

Interview with Tomasz Mostowski, a licensed private investigator from the Legalplus detective agency
 

Interview with Tomasz Mostowski, a licensed private investigator from the Legalplus detective agency
 

Interview with Tomasz Mostowski, a licensed private investigator from the Legalplus detective agency
 

Pursuing claims and recovering debts is a legitimate right of every creditor, as is checking partners’ credibility. But this should be done wisely and prudently. Not only money is at stake, but also reputation, says Jarosław Szeląg, legal director and compliance officer at a financial institution operating in the automotive market.

As of 30 June 2022, a summons to attempt a settlement, or commencement of mediation, will no longer interrupt the limitations period for claims. Instead, the limitations period will be suspended for the duration of these proceedings. Is this the end of an easy method to evade the statute of limitations? And have lawmakers carefully considered the consequences of suspending time limits that now usually expire at the end of the calendar year?

The Supreme Court of Poland regards protection of the creditor’s financial interests as the main purpose of punishing the debtor (and his supporters, if any) for behaviour preventing or diminishing the satisfaction of creditors. Therefore, persons handling the debtor’s affairs can be jointly and severally liable to the creditor.

It often happens that a creditor in a civil relationship is also harmed by the debtor’s action that may qualify as a crime. In such cases, in addition to pursuing claims through civil proceedings, the creditor can also take action against the debtor in criminal proceedings.

Often, debtors’ shares in companies are subject to seizure in security or enforcement proceedings. But the debtor does not lose its status as a shareholder in the company after the shares are seized, and the creditor still remains a third party with respect to the company. Thus the debtor may continue to exercise the corporate rights attached to the seized shares, making it difficult for the creditor to satisfy its rights. So it is worth remembering the possibility of challenging corporate resolutions, and appointing a receiver for shares seized in enforcement or security proceedings.

How should a spouse consent to incurring a debt encumbering the marital community property so that the creditor can obtain security against marital property or execute against marital property? And what should a creditor do if there is no written consent?

Dishonest debtors display great ingenuity in evading their obligations. They may also turn to advisers who, for a hefty fee, provide “sophisticated” ideas to lead creditors astray. Often such ideas involve the creation of legal entities (sometimes a whole group or “chain”) to hide components of the debtor’s business from creditors. Such actions constitute abuse of legal personality for the purpose of harming creditors. Can dishonest debtors and their supporters (including advisers) who knowingly use such methods really rest easy?

Often, both debtors and creditors believe that if a debtor has initiated a whole chain of transactions to evade paying debts, the case cannot be “unwound” and the creditor is defenceless. But in reality, in such situations dishonest debtors (and their allies) cannot rest easy. Both the legal provisions and the court practice give the creditor a chance to successfully challenge even a whole chain of fraudulent transactions.