Abstract

In the bankruptcy proceedings for a natural person (personal bankruptcy) matters that are not regulated otherwise are subject to the general bankruptcy regulations including liquidation of the bankrupt’s estate. This type of reference frequently ends in erroneous application of those regulations literally, without any modifications, in personal bankruptcy proceedings. The most frequent error is the application of the literal application of Art. 124.1 of the Bankruptcy and Reorganization Act of 28 February 2003 regulating the financial consequences of proclaiming bankruptcy of one of the spouses, whereas this regulation is applicable to personal bankruptcy only to a limited extent.

The literal application of the second sentence of Art. 124.1 of the Bankruptcy and Reorganization Act in personal bankruptcy proceedings brings about incomprehensible and unjustified consequences.

For this reason, in the case of personal bankruptcy the estate shall not include the entire marital property but only its adequate portion.

This view is upheld by the exceptional scope of the regulation of Art. 124.1 of the Bankruptcy and Reorganization Act, axiologically unjustified effects of literal application of this regulations to personal bankruptcy and practical difficulties as regards its application when personal bankruptcy of both spouses is proclaimed at the same time.

Practice shows that Art. 124.1 in conjunction with Art. 125.1 and 125.5 of the Bankruptcy and Reorganization Act erroneously applied in personal bankruptcy becomes an instrument of unjust inclusion of entire property owned by both spouses to a single bankrupt’s estate under disputes concerning the division of property after divorce, which should be strongly opposed.