Due to ever growing number of credit indebted citizens and those with threathening insolvency, the Croatian Government has adopted directives for introducing of a personal bankruptcy i.e. insolvency over the property of a consumer, as a completely new institute in croatian legal system.

It regards the bankruptcy procedure over the property of consumers, natural persons who are not sole entrepreneurs or craftsmen. Namely, according to the current Act on Bankruptcy Proceeding it is possible to conduct a bankruptcy procedure against such natural persons who act as craftsmen or sole entrepreneurs.

The aim of introducing of the personal bankruptcy is, as in other european countries, creating conditions for citizens- consumers to reschedule their debts and giving creditors a possibility to equally balance their claims.

Regarding the jurisdiction, it is foreseen that courts are competent for conducting the personal bankruptcy procedure, but also different chambers, counselling centres or conciliation centres, where creditors and debtors shall try to reach an agreement regarding consolidation of claims.

It is forseen that the bankruptcy procedure over property of an individual- i.e. personal bankruptcy is initiated by filing the petition in bankruptcy on the part of the creditor or bankruptcy debtor himself. The competent court shall inspect whether there are conditions for initiation of the procedure and invites parties to appoint the bankruptcy trustee. If the parties fail to reach an agreement in this regard, trustee will be appointed officially by the court, from the list of the registered bankruptcy officers, lawyers, judges, court experts, public notaries or distraint officers.

The appointed trustee would refer parties to one of the informal bodies for the purpose of reaching an agreement on the rescheduling of the existing debtor’s obligations. If the parties fail to reach the agreement in the informal procedure within 3 to 6 months, the trustee refers the case to the competent court with the list of creditors, obligations to those creditors and his suggestion regarding means of end ing the procedure. On the grounds of such list and after hearing of creditors, debtor and the trustee, the court decides either to suspend the proceeding or to continue the the proceeding by means of preparing the bankruptcy plan, personal debt management or release from the debt.

It would be the similar proceeding as it provided for entrepreneuers and companies, where the liquidator has a role of the bankruptcy trustee.

Further more, it is provided that the Act on Personal Bankruptcy shall regulate the conduction of consumers- record due to their control, with respect that after one bankruptcy proceeeding is concluded, it will not be possible to conduct another proceeding over the same person for the next 10 years.

Legal consequences of the opening of the bankruptcy over property of an individual during the procedure and after the probation period, shall be particularly regulated, after the Act on Personal Bankruptcy is finally brought.