Debtors Subject to Bankruptcy and Types of Application

Legal Article · 12 November 2026
Av. Thomas Andreas Di Constantinople

Bankruptcy is a collective enforcement route aimed at liquidating the debtor's attachable assets for creditors' common benefit. It cannot be sought against every natural or legal person. The first question is whether the debtor is subject to bankruptcy, followed by whether the statutory grounds for the particular application are met.

Article 43 of the Enforcement and Bankruptcy Law focuses on merchants and persons subject to bankruptcy under special provisions. A person's involvement in business activity does not invariably produce every consequence of merchant status. Factors such as ceasing trade and the company's legal form are also important.

In bankruptcy following enforcement, the process progresses through a bankruptcy payment order and related stages. In direct bankruptcy, application is made to the court on the special grounds listed by statute. Non-payment alone does not constitute a common ground satisfying every condition of both routes.

The enforcement office does not issue a bankruptcy order; judicial examination by the competent commercial court of first instance is required. Territorial competence depends on the debtor's business centre and relevant special rules. Disputes over the existence of the claim and assessment of bankruptcy conditions may differ according to the application type.

For example, failure to collect in an individual attachment file does not automatically make the debtor bankrupt. Opening bankruptcy creates a liquidation regime affecting other creditors as well as the enforcing creditor. Using attachment and bankruptcy routes together or successively also does not justify double recovery of the same claim.

This article has been prepared for general legal information purposes.