Debt relief is a complex but crucial process that allows individuals and entrepreneurs to regain financial liquidity, secure their assets, and begin a new phase of their lives or business. Choosing the right debt relief tool depends on many factors, including the legal form of the business, the type of debt, the financial status, and the stage of enforcement. How can we get rid of debt? Below, we present a summary of possible actions.
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Contents:
1. Where to start?
The first step towards debt relief is understanding your financial situation and making an informed decision. So where do you begin?
- Debt audit – Make a list of all your obligations, broken down into:
- current and expired
- secured and unsecured
- judicial and extrajudicial
- Liquidity assessment – Analyze how much you can realistically allocate each month to debt repayment. Evaluate your income and necessary living or business expenses.
- Identification of enforcement risk – Check whether enforcement proceedings are pending against you and whether you have already received a payment order or an enforcement title.
- Choosing a strategy – Decide whether you will use out-of-court solutions (negotiations, consolidation) or whether court proceedings will be necessary (bankruptcy, restructuring).
- Contact with an advisor – Consultation with a restructuring advisor will help you choose the optimal path, avoid mistakes and carry out the entire process effectively.
Remember: Time works against the debtor – the sooner you make a decision, the more solutions you have at your disposal.
2. Judicial debt relief
This procedure allows individuals (private individuals) to obtain full or partial debt relief. The proceedings are initiated at the debtor's request and may result in a repayment plan or debt relief without a repayment plan.
Arrangement with creditors (consumer and corporate)
The consumer arrangement is a new institution that enables debt restructuring for individuals with the active involvement of the court. For companies, the arrangement forms the basis of arrangement and partial arrangement proceedings, allowing them to continue operating.
It encompasses four types of proceedings: arrangement approval, accelerated arrangement, arrangement proceedings, and remedial proceedings. The goal is to save the company, conclude an arrangement, and avoid bankruptcy.
This procedure leads to the liquidation of assets and the satisfaction of creditors. It ends with the company being deleted from the National Court Register.
3. Extrajudicial debt relief
Faster and less expensive than court procedures, they involve reaching agreements with creditors, often with the support of law firms.
Debt consolidation
Combining multiple debts into one reduces monthly payments and makes budget management easier.
External capital
Bringing in an investor or bridge financing (e.g. venture capital, mezzanine) to help pay off debts and continue operations.
4. Liquidation of companies as a form of debt relief
Liquidation stages:
- Resolution on opening liquidation
- Appointment of a liquidator
- Inventory and sale of assets
- Satisfaction of creditors (in the order of the Commercial Companies Code and the PU)
- Deletion from the National Court Register
This solution is often the most effective method of ending a business without going bankrupt.
5. Anti-debt collection as protection against enforcement
What does it involve?
- Verification of the validity of claims (e.g. limitation period, lack of legal title)
- Objection to a payment order
- Blocking execution by collateral the debtor's interests
- Negotiations with a bailiff or creditor
Attention: Anti-debt collection does not mean avoiding liability, but using available means of defense.
6. Differences between debt relief for companies and private individuals
| Criterion | Private individuals | Companies |
| Responsibility | All personal property | The company's assets |
| Complexity | Lower | High (audit, valuations) |
| Effect | Debt relief and a fresh start | Debt relief, business continuity, and in justified cases, liquidation |
7. The most common mistakes when getting rid of debt
- Procrastination
- Independent decisions without advice
- Bypassing out-of-court solutions
- Lack of legal analysis of claims
8. Examples from practice
Example 1: A private individual with payday loan debts
The debtor had 12 outstanding debts, including three that were overdue by more than three years. After analyzing the statute of limitations, an objection was filed against the payment orders. The remaining debts were covered by a consumer settlement agreement. The result: an installment of PLN 800 instead of PLN 3,200.
Example 2: Catering company
The pandemic caused a loss of liquidity. The company implemented accelerated arrangement proceedings and concluded a debt reduction agreement with 70%. The business was saved, with 18 employees.
9. The importance of legal and financial advice
Experienced advisor:
- Analyzes the client's situation
- Selects the appropriate debt relief path
- Represents you before the court or creditor
- Protects against formal errors
10. Summary
Debt relief doesn't have to mean failure. It can be a chance for a fresh start and building a secure financial future. The key is quick reaction and thoughtful decisions.
Contact us with the PMR Restrukturyzacje SA team – we will help you get out of debt and regain control of your finances.
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