Fizetésképtelenség

Fizetésképtelenség is the Hungarian term for insolvency or bankruptcy. It describes a state where an individual or a legal entity is unable to meet their financial obligations as they become due. This can manifest in two primary forms: inability to pay debts (fizetési elmaradás) and exceeding liabilities over assets (többleteladósodás).

Insolvency proceedings in Hungary are governed by specific legal frameworks aimed at resolving the financial distress of debtors and protecting the rights of creditors. For individuals, this can lead to personal bankruptcy, where assets are liquidated to pay off creditors, or a debt settlement plan. For companies, insolvency can result in liquidation (felszámolás), where the company is dissolved and its assets are sold, or a restructuring process (csődeljárás), which allows for a reorganization of debts and operations to avoid liquidation.

The goal of insolvency procedures is generally to ensure a fair distribution of the debtor's remaining assets among creditors or to provide a mechanism for financial recovery. It is a legal process that requires court intervention and adherence to strict procedural rules. Factors leading to insolvency can include poor financial management, economic downturns, unexpected expenses, or a significant decrease in revenue.