Are you closing an important deal and need to do a thorough background check on your potential business partner? Or have you already closed the deal, the money isn’t coming in and you want to find out where the catch is? Use public registers to do so. We can advise you on what can be found in them and what to do if the counterparty is indeed insolvent.
It is not enough to have well-written contracts to close a good deal. You also need to know who you are contracting with. Depending on the type of contract you are entering into, you can then check various public sources and do some research on the counterparty.
By simply entering the name of an individual or company, we can find out many interesting things: economic or criminal cases in the media, various reviews and statements by clients or former business partners. If we want to dig a little deeper, there are various registers.
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For basic information, we’ll probably head to the commercial register. Here we can find all the essential information such as the company’s registered office, who can act for the company, what its share capital is and so on.
Tip: If you are interested in how to read and search the Commercial Register, read our article.
If we expect mutual financial transactions, then the debtors’ register should be at the centre of our concern. However, there are several types of registers and it is always important to distinguish which one is being referred to.
The most important of these is the Central Register of Executions, operated by the Chamber of Executors. In it we can find information on pending executions conducted by members of the Chamber. However, not all pending foreclosures are recorded here, for example those conducted by state authorities or health insurance companies. Another very useful resource is SOLUS, where different economic sectors share information on outstanding debts (more than three months). These include, for example, banks, building societies, non-bank financial institutions, telecommunications providers and energy distributors.
In addition to the commercial register, check also the insolvency register ISIR, which is operated by the website justice.cz. This register provides an overview of pending insolvency proceedings, their status and the parties involved. If you suspect insolvency proceedings against your business partner, check here. The insolvency justice debtors list is a useful tool for checking the counterparty before entering into a contract.
Thanks to the insolvency proceedings, the debtor’s debts are settled and the debtor can thus start with a “clean slate” and the creditors’ claims are at least partially settled.
For a more detailed overview of insolvency, you can use the justice insolvency calculator available on justice.cz, which allows you to calculate the debtor’s non-recoverable amount. This will give you a better understanding of their financial situation.
If you find that your business partner is listed in the insolvency register on justice.cz, this means that he or she is involved in insolvency proceedings. The insolvency court then decides on the next course of action – for example, whether to approve debt relief or liquidation. If you want to investigate this further, it is worth making an enquiry at isir justice.
Several basic conditions must be met for insolvency to be declared:
Subsequently, a proposal for debt relief must be filed and approved by the insolvency court. A person in insolvency must gradually start to repay his debts, but at the same time he is left with a certain amount of uncollectible money. This can increase, for example for married people and parents with children. The amount of the non-forfeitable amount can be calculated in the insolvency calculator, which is also available on justice.cz.
If the debtor has filed for insolvency, he is obliged by law to list all creditors to whom he owes money. If one of the creditors has filed a petition, it is up to the other creditors to add their claims.
Tip: Want to know how the insolvency register can protect your finances? Read our article.
As a creditor, you can file an application in the insolvency proceedings to assert your claim against the debtor. By doing so, you express your wish for the debtor to pay you a part of the insolvency proceedings. The application must be made on the prescribed form, with supporting documents to prove the existence and amount of the claim. The deadline for filing the application is very important and must be respected by the creditor, otherwise his claim will not be included in the insolvency proceedings.
The only exceptions are claims against the assets and claims equal to them, which can be filed at any time during the insolvency proceedings and which are not filed by way of an application. However, this generally does not apply to ordinary creditors, mainly the insolvency administrator’s remuneration and expenses and other claims listed in the Act that arose after the decision declaring insolvency.
There is a specific mandatory electronic form for filing a claim, so it cannot be filed in any other way.
Tip: Has a friend asked you to guarantee his loan? Consider well whether the friendly service is worth the potential trouble. If you think it is, study everything beforehand to be sure, consult a lawyer about the contract, and maybe read our article on how not to get into trouble as a guarantor.
Debtors sometimes mistakenly believe that they have to send the court an application to end the insolvency proceedings. In reality, however, the insolvency procedure ends with the court’s decision approving the insolvency administrator’s report on the implementation of the insolvency procedure. As part of this decision, the debtor is released from the obligation to pay outstanding debts or debts that were not (and should have been) entered into the arrangement at the time of its approval. In this context, the debtor should serve the court with a petition for exemption from payment of the remaining debts. The debtor’s exemption from repayment of unsatisfied debts does not apply to debts incurred through criminal activity or incurred during the period of the arrangement.
In words of numbers, the insolvency proceedings end after the debtor has repaid either 100 % of his debts, 60 % of the debts within three years, 30 % of the debts over five years or if the court so decides.
After the insolvency proceedings have ended, the records are kept in the register for a further five years. Thereafter, the insolvency court will make an automatic deletion. If you need a template for applying for an expungement from the insolvency register, you can find it online or contact our law firm. Keep in mind, however, that an expungement does not normally need to be applied for as it is done automatically.
If the debtor meets the conditions of the insolvency resolution, he or she can file a petition for termination of the insolvency proceedings together with a petition for discharge of the remaining claims. However, this step must be approved by the insolvency court.
Before entering into an important contract, check the counterparty in public registers such as the Commercial Register, the Insolvency Register ISIR or the Central Registry of Executions. Use registers such as SOLUS or justice.cz, which provide information on foreclosures and insolvencies, to determine the financial situation of the counterparty. If you find out that your business partner is insolvent, you can file your claim using the electronic form on justice.cz. The deadline for filing is important. Insolvency proceedings end with the court’s decision. Once the conditions have been met, the debtor may be released from outstanding claims. Insolvency records are automatically deleted after five years. If you need legal help, for example with a pre-action notice, contact the experts. This step can be effective without the need for court proceedings.
We will stand up for you if someone violates your rights. We’ll complete a pre-suit notice and make sure you get back what’s owed to you. We will handle the matter quickly, flawlessly and professionally. You can only pay after the service has been provided.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
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