The Croatian legislator took the decision to draft a special Consumer Bankruptcy Act (hereinafter referred to as ‘CBA’) in 2015, which entered into force on 1st January 2016. The goal of this Act was to allow an honest consumer to be discharged of all obligations remaining after his or her assets had been liquidated and after the obtained proceeds had been distributed to his or her creditors. The basic rules of this Act are presented in this chapter. Croatian consumer bankruptcy proceedings are similar to German consumer insolvency proceedings in many aspects. The Croatian legislator in 2015 also adopted a new Bankruptcy Act introducing pre-bankruptcy proceedings, in accordance with the European Commission Recommendation of 12th March 2014 on a new approach to business failure and insolvency. The rules of the new Bankruptcy Act shall accordingly be applied during the course of consumer bankruptcy proceedings unless provided otherwise by the Consumer Bankruptcy Act.
Jasnica Garašić and Siniša Petrović
This chapter looks at the treatment of executory contracts under Croatian corporate insolvency law and the need for regulatory reform in the area. With reference to the first aspect, the chapter observes that Croatia has a good general framework of rules on treatment of the executory contracts in bankruptcy proceedings. Statutory improvements are desirable in the area of the pre-bankruptcy proceedings, because the effects of the opening of these proceedings on the debtor’s contracts could be better regulated. Statutory improvements are also desirable with reference to the treatment of the pre-insolvency agreed contractual remedies, in order to enhance legal predictability and certainty. Completely new rules are necessary regarding insolvency of a group of interconnected (related) companies, including the rules that would regulate executory contracts in such a situation. With reference to the latter, the authors argue that the main ‘drivers’ of reform in the area of insolvency law in Croatia are neither a need to secure international funds or political support, nor a desire to boost national competitiveness and international attractiveness. The principal motive for the reform is the necessity, perceived by the legal and business community, to have good and efficient insolvency procedures. This necessity is even accentuated in a situation where the country’s economy is struggling in the aftermath of the financial crisis.