October 15, 2014
Significant changes in the Insolvency law of Latvia were introduced with the amendments approved by the Latvian Saeima on the 25th of September. Among key issues touched upon by the new regulation a so-called principle of the “dropped-off keys”, meaning that a debtor (natural person) will be discharged of the obligations towards the creditor, which remain after the sale of the property that was used to secure the loan. Said principle will only be effected in situations where debtor’s dwelling is being sold in the course of the insolvency procedure. It shall be noted, however, that this order will relate to the property over which the security is established after January 1, 2015.
Another significant change conerns the period of the insolvency procedure of natural persons. For instance, where a debtor will be able to pay at least 20% of the obligations remaining after the sale of property, the period will be reduced from 3 years to 1 and a half. Amendments will take effect on the 1st of January 2015.