If the debtor owns more debts than property, he/she can ask the court for a debt settlement. As a result of the debt settlement, those claims of creditors that have not been satisfied become irrecoverable. This gives the debtors another chance to get out of negative figures and stand up on their feet again.
The probationary period begins when the court decision allowing such a settlement becomes legally valid. During this period the debtor is obliged to fulfill certain obligations. After the expiry of the probationary period, the court decides the debt settlement.
The three-year probationary period is a fundamental advantage when compared to other countries such as Germany where relieving debts can last up to 7 years.Moreover, one of the biggest positives of relieving debts in Slovakia is the fact that the minimum amount of the total owed sum which the debtor has to pay their creditors is not determined by law. In comparison with the Czech Republic, where the debtor has to pay up to 30% of their debts in order to obtain the permission for a debt settlement. In compliance with the law, at the end of the calendar year, the debtor is obliged to provide the administrator with financial resources in the amount of up to 70% of their net income for the past probationary year, where the minimum amount is not given.These huge differences between legal wordings attract more debtors, who would like to get rid of their undertakings right in Slovakia. In conclusion, we should add that the key question that needs to be solved here is the fulfillment of the conditions for the establishment of a Slovak court as a court authorized for the debt settlement.