Bankruptcy in Malta is governed by the Commercial Code which provides for both individuals and companies unable to pay their debts. It should be noticed that personal bankruptcy was not regulated until several years back. Also known as the Bankruptcy Law, Chapters 7 and 13, cover the individuals, respectively companies in Malta which can no longer pay their creditors.
Filing for bankruptcy as an individual is different that the bankruptcy procedures for companies, and our lawyers in Malta can explain these differences. They can also assist companies filing for bankruptcy in Malta.
The content of the Maltese Bankruptcy Law
The Bankruptcy Law in Malta provides specifically for individuals and companies unable to settle their debts with the creditors in the moment they suspend all the payments. There are two types of bankruptcy proceedings acknowledged by the Maltese legislation:
- – voluntary bankruptcy which is initiated by the debtor;
- – compulsory bankruptcy which is initiated by the creditors.
Before declaring bankrupt, a company or its creditors is to file a declaration or a petition with a Maltese court which will dispose the commencement of restructuring or insolvency. During the last few years, courts in Malta agree easier with companies filing for bankruptcy in order to allow them to restructure their activities and avoid the dissolution of the business.
Our attorneys in Malta can offer details about the two types of bankruptcy procedures. They can also assist in financial reorganization planning.
What to do before filing for bankruptcy in Malta
The Bankruptcy Law in Malta was amended several times during the years in order to allow companies and individuals to appeal to counselling before setting off the procedures. In the case of companies, the management board or the directors must convene a meeting and decide whether to start bankruptcy proceedings or start financial reorganization in order to save the company. The Bankruptcy Law and the Companies Act also allows them to sell a part of their shares in order to avoid bankruptcy and insolvency. If these methods do not work, bankruptcy procedures may begin.
For assistance with bankruptcy procedures, do not hesitate to contact our law firm in Malta.