Critical deadlines and procedures for filing claims in insolvency proceedings
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You learned that your debtor has been declared bankrupt. Do you know how much time you have to file your claim?
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What happens if you miss the deadline for filing claims in insolvency proceedings?
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What form should I use to submit my claim and what documents should I attach to be recognized as a creditor?
The company learned that the debtor, a construction firm, had been declared insolvent. The debt amounted to €22,000. The director decided that “we wouldn’t get anything anyway” and decided not to file a claim. A year later, it was discovered that some assets had been sold, and the creditors each received 30 percent of the amount. The company received nothing because it missed the deadline for filing its claims.
What is the insolvency process?
Insolvency proceedings are a judicial procedure for legal entities unable to meet their financial obligations. After insolvency is declared, all creditor claims are considered in a single procedure under the supervision of an appointed administrator.
To receive money from the bankruptcy estate, the creditor must file his claim in a timely manner.
Critical deadlines
The deadline for filing creditors’ claims is one month from the publication of the insolvency declaration in the official gazette “Latvijas Vēstnesis.” This is the standard deadline set by the Insolvency Law.
Important: the deadline is calculated from the publication date, not the date you learned about it. If you don’t follow publications, you can skip it.
What to do: Sign up for notifications in “Latvijas Vēstnesis” when your debtors are mentioned. It’s free and takes five minutes.
How to file a claim
The application is submitted to the insolvency administrator, not to the court. The administrator’s details are published along with the insolvency declaration in “Latvijas Vēstnesis” and in the insolvency register at ur.gov.lv.
Application form: written. The application must contain: creditor information (name, registration number, address, bank details), the amount of the claim broken down by type (principal debt, interest, penalties), the basis for the claim (reference to the agreement), and the priority of the claim.
Documents for the application
The contract on the basis of which the claim arose
Invoices, delivery notes, certificates
Calculation of the claim amount
Correspondence confirming the debt
A court or arbitration decision, if any, significantly strengthens the position
Payment documents confirming the fact of non-payment
Order of requirements
The law establishes a priority for settling claims. The following are satisfied first: litigation expenses, employee claims, state tax claims, and secured claims. Unsecured commercial claims are generally satisfied last.
This means that even a properly filed claim can receive zero percent if there are insufficient assets. But this is better than not filing at all—if there are assets, there’s a chance.
Why does having an arbitration decision help?
If the creditor already has an arbitration or state court decision, this significantly simplifies the recognition of the claim. The insolvency administrator cannot challenge the debt established by the court; only the court can do so, if there are grounds for doing so.
That’s why, at the first sign of financial difficulties, immediately go to court. A judgment obtained before insolvency is declared is significantly more secure than a claim filed during the process.
One month. That’s how long you have to claim your rights. After that, it’s just observation.
This article is for informational purposes only and does not constitute legal advice.