While a contractor’s declaration of insolvency might sound like a definitive end to cooperation, for a creditor, it often marks just the beginning of a frequently lengthy and thankless process of recovering debts. According to the law, insolvency proceedings aim to collectively satisfy all creditors from the debtor’s assets. In practice, this is more about participating in a loss than a chance to recover the full debt – the more creditors there are, the lower the chances of full satisfaction. From this “pool,” the liquidator (syndyk) takes first, followed by ZUS (Social Security), the Tax Office, and employees – leaving ordinary suppliers and service providers to queue up. Moreover, anyone who fails to report their claim on time might be omitted from the distribution of the bankruptcy estate’s funds. Therefore, timeliness and correct procedure are crucial, especially for entrepreneurs who are themselves fighting for survival.
How to Know if a Contractor Has Declared Insolvency? Where to Look for Information
The first sign that a contractor has “disappeared” not only from the payment radar but also from the market may be an official announcement of their insolvency. Such information is published in the Official Court and Economic Monitor (MSiG), but since December 2021, the primary source for this information has become the National Register of Debtors (KRZ) – accessible online and public for everyone. It is there that you will find the latest data on the initiation of proceedings, the name of the court, the case file number, the date of insolvency, and the liquidator’s details.
Important: Just the keyword “insolvency” is not enough – precision matters. Pay attention to whether the insolvency concerns the correct entity (full name, NIP, KRS), whether a deadline for reporting claims has been specified, and which court is handling the case. The public nature of the proceedings means that you can – and indeed should – continuously monitor the debtor’s status in the KRZ to avoid missing key deadlines. This is the first step towards recovering at least a part of the dues.
Reporting a Claim – How, When, and What You Need to Know
To have a chance of recovering even a part of the debt, the creditor must report their claim to the bankruptcy estate – and this must be done exclusively electronically, through the KRZ system (National Register of Debtors). This stems directly from Article 236 of the Bankruptcy Law.
The application form must contain: creditor and debtor details, the amount of the claim, its title and nature (e.g., whether it results from an invoice, contract, judgment), evidence of its existence, and an indication of the claim’s category (i.e., in what order it will be satisfied).
Lateness has consequences: Although a claim can be reported after the deadline, it incurs a fee and the risk that the creditor will be omitted when the list is drawn up. It is therefore better not to wait until the last minute – because in insolvency proceedings, not only the amount of the claim matters, but also timeliness and precision.
Secured Creditor – A Privileged Participant in Distribution
If a creditor holds a security interest over the bankrupt’s assets – e.g., a mortgage, pledge, or conditional transfer of ownership for security – they have the right to priority satisfaction from the proceeds obtained from the sale of the secured asset. According to Article 336 of the Bankruptcy Law, sums obtained from the liquidation of assets encumbered by such security are primarily allocated to repay creditors whose claims were established on them, provided the value of these assets allows it. Only the surplus – if any – supplements the general bankruptcy estate intended for other creditors.
Note: Even a secured creditor (e.g., by mortgage) must, as a rule, independently report their claim in the KRZ system. The only exceptions are specific claims arising from an employment relationship, which, according to Article 237 of the Bankruptcy Law, are entered onto the list ex officio. Failure to report by a secured creditor may result in the loss of the right to satisfaction from the bankruptcy estate, even if the security formally still exists.
How Much Can Be Recovered? Categories of Claims and Order of Satisfaction
In insolvency proceedings, not all creditors are treated equally. The amount recovered depends on the order of satisfaction. However, before the distribution of the estate occurs, the costs of the proceedings are satisfied (Article 230 of the Bankruptcy Law).
Subsequently, claims are divided into categories (Article 342 of the Bankruptcy Law):
- Category I – claims from employment relationships, alimony, annuities, ZUS contributions from three years before insolvency;
- Category II – includes taxes, other social security contributions;
- Category III – interest, fines, donations;
- Category IV – claims of partners/shareholders from loans or similar legal acts (with numerous exceptions).
In practice, only creditors from the first two categories can count on a significant recovery. Creditors from the third and fourth categories often receive nothing. For most unsecured suppliers and contractors, recovery is usually minimal – often a few percent of the principal amount.
Restructuring is Not Insolvency – What Not to Do
The opening of restructuring proceedings signals to the creditor: STOP to enforcement. Regardless of the form of restructuring – be it expedited arrangement proceedings, ordinary arrangement proceedings, rehabilitation proceedings, or approval of an arrangement – there are restrictions on pursuing claims.
According to the relevant provisions of the Restructuring Law (e.g., Articles 259, 312 of the Restructuring Law), enforcement is suspended or blocked for claims covered by the arrangement. Any attempt at debt collection fails – not only financially but also procedurally.
Restructuring is an arrangement – literally. The debtor proposes repayment terms, and creditors decide whether to accept them. The creditor can no longer pursue claims on their own – but they can, and should, actively participate in voting on the arrangement. Sometimes it is worth accepting it – sometimes it is better to vote against.
How to Secure Yourself for the Future – Before It’s Too Late
A contractor’s insolvency is not just a legal problem – it’s a real financial loss. Therefore, it is worth acting preventively before a crisis occurs. Here are some proven methods:
- Monitoring contractors – regularly checking partners in debtor registers (BIG, KRD) and tracking entries in the National Register of Debtors (KRZ) allows you to catch the first signs of problems.
- Contractual safeguards – it is worth using mortgages, pledges, conditional transfers of ownership, or guarantees. Even the simplest form – retention of title until payment of the price (Article 589 of the Civil Code) – can protect against loss.
- Advances and staged payments – it is better to spread the risk over time than to wait for payment “at the end.”
- Contractual clauses – it is worth analyzing contracts for the possibility of early termination in the event of a contractor’s insolvency risk or deterioration of their financial situation.
Do Not Delay, Act Consciously
You do not have to act alone. In situations such as contractor insolvency, the support of specialists can determine the effectiveness of debt recovery. Seek help from experts in debt collection and insolvency law at: https://rpms-legal.com/debt-collection/.
Founder Dinis Guarda
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