1. The New Polish Consumer Insolvency Law (Upadłość Konsumencka) Luigi Lai Author's research is supported by the Autonomic Region of Sardinia PO Sardegna FSE 2007-2013. L.R.7/2007 “Scientific research and innovation technology promotion in Sardinia”

2. If we try to find a game in which we could present some analogies of consumers behavior. We would discover that such a game could be Monopoly.

3. In real life as in Monopoly, bankruptcy is a possible option

4. Especially when bankruptcy is applied to certain kind of consumers.

5. In 2008 the Polish Parliament considered and passed the first Consumer Insolvency Law. It came into force at the end of March 2009. Technically it consists in an amendment to art 491 - Polish Insolvency Law (PIL).

6. A New Chapter (Nr. 5) has been added: Postępowanie upadłościowe wobec osób fizycznych nieprowadzących działalności gospodarczej. Insolvency procedures for natural persons not running an economic activity.

7. Polish Consumer Insolvency Law is based on 4 Main Principles: Writing off debts has to be an exception. Debtors should repay debts to the maximum of their abilities. Insolvency procedures should be as cheap as possible. Creditors should participate in the procedure.

8. The Procedure consists of three parts A preliminary phase of formal control. A decision procedure phase. Execution of the repayment plan.

9. Phase one – Bankruptcy petition The sole debtor may file a petition for bankruptcy. The p ossibility to file for bankruptcy can happen only once in ten years. Only natural persons not running a działalność gospodarcza (economic activity).

10. It’s b etter to understand działalność gospodarcza as Sole Proprietorship. This interpretation derives from the assumption that the Lawmaker intended to avoid a commixture between debtor's and an eventual company's assets

11. The debtor has to provide a declaration of his personal assets and financial situation, simultaneously the court has to contact the debtor's urząd skarbowy (tax office) in order to double check debtor’s declaration.

12. The typical consumer has no cash or account book to refer to; for this reason the court has to order the publication (in a main local newspaper and in the court building) of a notice concerning the petition for bankruptcy; so that unknown creditors will be informed.

13. Bankrupt's estate liquidation and repayment plan The bankrupt subject loses all his possessions and if he has a real estate property, also the real estate property will become part of bankrupt's estate. From the amount of money obtained by the real estate property sale, the debtor receives a sum of money allowing them to rent a small (as small as possible) apartment for one year. Sums derived from alimony and child support do not enter into the liquidation process.

14. Repayment Plan The repayment plan has to be designed in such way to ensure the debtor an amount of money sufficiently adequate as not to suffer indigence. The repayment plan can not last more than 5 years and the consumer may file for bankruptcy only once in ten years

15. Repayment Plan Debtors during this time lose the power to carry out acts which could exceed the normal administration and they are obliged to present to the court an annual report on his repayment plan execution.

16. The Court at the end of the repayment program, on the base of Consumer's petition, may freeze the rest of the unpaid debts. Vice versa if the Consumer does not respect his duties, the Court will completely freeze the procedure and not the debts.

17. Practical result According to The Conference of Financial Companies in Poland (KPF) data Until 2010 less than 1400 people petitioned for bankruptcy, in the whole of Poland. A little alarming is that: ¾ of petitions for bankruptcy were rejected due to errors in form or in payment. Until September 2010 only 19 petitions were accepted, in the whole of Poland.

18. Possible Reasons Typical insolvent consumers are poorly educated with unstable jobs. The petition forms appear to be too complicated for the average insolvent consumer. As they say: when it rains, it pours!

19. Main Conclusion Be informed in order to make a fresh start. Thank you for your kind attention.

20. UNIONE EUROPEAREPUBBLICA ITALIANAREGIONE AUTONOMA DELLA SARDEGNA Author’s research is supported by the Autonomic Region of Sardinia PO Sardegna FSE 2007-2013. L.R.7/2007 “Scientific research and innovation technology promotion in Sardinia ” Contact: Luigi Lai Project page www.euroinsolvency.eu luigi_lai@yahoo.com Personal page www.luigilai.it