March 2023

Decision of the Court of Arbitration of Lavrio on the Provision of a Second Chance to an Entrepreneur with Debts of approximately 1.300.000,00 euros

The decision No. 21/2023 of the Lavrio Magistrate's Court was issued, ordering the registration of our client's name in the Electronic Solvency Register, pursuant to article 77§4 of Law No. 4738/2020, following the filing of a small-scale bankruptcy petition. The court ruled that, in this particular case, there was a case of cessation of payments by the debtor, due to the existence of overdue debts of approximately 1,300,000.00 euros, in particular to banks and public bodies. As regards the registration of the debtor's name in the Electronic Solvency Register instead of declaring him bankrupt, the court held that, on the one hand, his real estate was encumbered with mortgage liens and, on the other hand, the debtor's only free asset was a car worth approximately EUR 3,000, which, however, was not considered to be sufficient and easily liquidated property to cover the costs of the bankruptcy. From the publication of the above decision in the Electronic Solvency Register, the period of three years started to count, after which the debtor will be completely discharged from his debts. 

Two issues were of importance in this decision: a) firstly, the confirmation of the provision of the law which states that the debtor's unencumbered property is decisive in order to assess the sufficiency or otherwise of the latter and b) secondly, the judgement on the low value of the asset which favours the insufficiency of realisable property. Therefore, finally, if the debtor owns a car or any other object of low commercial value, the bankruptcy petition is rejected but the debtor is discharged from his debts after 3 years from the date of his name being entered in the Solvency Register.

(for more see here and here)