What is liquidation?

About liquidation

Liquidation proceedings are proceedings in which the insolvent debtor satisfies the creditors’ claims in accordance with the law, in connection with the termination without a legal successor.

In the event of the insolvency of the debtor, liquidation proceedings can be initiated by

  • the debtor him/herself,
  • the creditor,
  • the liquidator, or
  • the court of registration.

If the debtor requests the winding-up proceedings, this requires the prior approval of the supreme body. The application must be accompanied by:

  • the instrument of approval of the supreme body,
  • balance sheet not older than three months,
  • the tax number of the debtor,
  • the list of creditors, the amount of loans and the maturity date,
  • proof of payment of the HUF 15,000 publication fee reimbursement.

The application shall state the names of all the financial institutions holding the debtor’s accounts and the number of accounts held there, including the number of accounts opened after the application has been lodged. The debtor may apply for liquidation proceedings if he does not wish to avail himself of the possibility of bankruptcy proceedings.

If the creditor requests the opening of proceedings, the application must state the title of the debtor’s debt, the due date and a brief description of why he considers the debtor insolvent. The necessary documents must be attached to prove the contents of the application.

If the liquidation proceedings have been requested by the debtor, the creditor or the liquidator, the court is obliged to examine the submitted application. As a result, in the absence of the above-mentioned annexes, it may order the rectification of deficiencies, in the cases specified by law, decide to reject the application without a substantive examination, or in the absence of a rejection, examine the debtor’s insolvency.

If the liquidation has been requested by the creditor and has not been rejected without a substantive examination, the court shall immediately notify the debtor of the submission of the application by sending a copy. The debtor must declare within 8 days of receipt of the notification whether he acknowledges the contents of the application. In the event of recognition, you must also state whether you are requesting a deferral of the debt settlement and the names of all the financial institutions that hold the accounts and the number of accounts held there, including the number of accounts opened upon receipt of the request. If the debtor does not make a statement to the court within the above time limit, the fact of insolvency shall be presumed.