The costs of insolvency proceedings are covered by the estate. They are covered primarily by the debtor and secondarily by either the petitioner’s deposit or the state.
Costs – particularly the insolvency practitioner’s fee and cash expenses – should be covered out of the estate, i.e. they should be borne by the debtor. Other types of costs are the costs of managing the insolvency estate (insurance, property tax, energy supplied to the immovable property being managed, the ‘repair fund’, etc.), the costs of selling the estate (value added tax if the debtor is registered for VAT, the auctioneer’s fee and costs, the estate agency’s fee and costs, fee stamps, etc.), costs associated with accounting, legal counsel or archiving, etc.
As the insolvency estate is not always large enough to cover the costs, the insolvency court may, before deciding on an insolvency petition, order the insolvency petitioner to pay a deposit on the costs of the insolvency proceedings by a set deadline where this is necessary to cover the costs of proceedings and the resources for this cannot be secured by other means. This applies even if it is clear that the debtor has no assets. The law sets an upper limit for the amount of the deposit. If there are multiple insolvency petitioners, they are required to pay a deposit jointly and severally.
If the insolvency estate is unable to cover the costs, the remainder is covered by the deposit on the costs of insolvency proceedings, i.e. this is borne by the petitioner.
If not even the deposit covers the costs, they are borne by the state. Special legislation caps the amount of costs borne by the state.read more
Reference to legal acts
Sections 108 and 168 of Act No 182/2006 on bankruptcy and the management thereof (the Insolvency Act), as amended
Responsible Public Authority
Ministry of Justice of the Czech Republic
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