Over-indebtedness is no longer a dead end. Since 2018, when Romanian Law 151/2015 became effectively applicable, good-faith individuals have had a legal procedure for restructuring their debts — and, at the end, they can be discharged of the remaining debts. Here is how it works, without the myths.

Who can file for personal insolvency?

The essential conditions under Law 151/2015:

  • Debt threshold: at least 15 national minimum wages;
  • State of insolvency: due debts have been unpayable for at least 90 days;
  • Good faith: the debts must not stem from bad faith or fraud; no conviction for economic offenses in the past 5 years;
  • Connection to Romania: domicile or residence in the country for at least 6 months;
  • No other personal insolvency procedure closed with a debt discharge in the past 5 years.

The three forms of the procedure

1. The repayment plan (the administrative procedure)

The main form: together with the administrator of the procedure, the debtor proposes to creditors a payment plan over 3–5 years, calibrated to actual income. During the plan, forced executions are suspended, and interest and penalties on unsecured claims stop accruing under the conditions of the law.

2. Asset liquidation (the judicial procedure)

When income does not allow a viable plan, the court may order the realization of the seizable assets. Goods essential to daily life — the bare necessities — are not touched.

3. The simplified procedure

For debtors with no seizable assets or income, with low debts (under 10 minimum wages), above the standard retirement age or with lost work capacity — a fast procedure, with 3 years of supervision.

What happens to the family home?

The most common fear — and the most widespread myth. The reality: the family home enjoys special protection. The repayment plan can provide for keeping it, usually by continuing to pay the mortgage installments, under conditions approved by the insolvency commission. Selling the home is neither automatic nor the rule.

What are the restrictions during the procedure?

The procedure requires discipline: the debtor lives on a supervised budget, cannot take on new loans without approval and must report changes in income. In exchange, they escape the pressure of forced executions, the collectors' phone calls and the spiral of penalties.

The discharge of residual debts — the fresh start

The central benefit of the procedure: upon completing the plan or the liquidation in good faith, the court may order the discharge of the residual debts. The debts left uncovered are wiped out, and the debtor gets their financial life back. That is the purpose of the law: reintegration, not punishment.

Is it worth it? When yes, when no

The procedure is worth considering when debts clearly exceed long-term payment capacity. It is not suitable for passing difficulties — there, direct negotiation with creditors is faster. A correct assessment of the situation, before filing, makes the difference: a poorly prepared petition can be rejected for apparent bad faith, blocking access to the procedure.

If you are considering this procedure, read the dedicated service page or book a confidential discussion — together we will assess whether you meet the conditions and which form suits you.

This article is for information purposes and does not constitute legal advice.