Insolvency proceedings timeline – from filing

A Warsaw-based trading company misses two consecutive VAT payments. The management board meets in an emergency session. One director asks: "Are we already insolvent?" Another asks: "What happens if we file?" The room falls silent. Nobody knows the timeline, the costs, or what filing actually triggers. That uncertainty is dangerous – and entirely avoidable.

Polish insolvency proceedings follow a structured statutory sequence governed by the Prawo upadłościowe (Insolvency Law, PU). The board must file a petition within 30 days of the company becoming insolvent. From that filing, the process moves through court admission, appointment of a trustee, creditor notification, and asset liquidation or a restructuring arrangement – typically spanning 18 to 36 months from petition to closure. Personal liability of directors attaches if the 30-day deadline is missed.

This guide walks through each stage in sequence: the filing obligation and its triggers, what happens inside the courthouse during the first 60 days, how the trustee administers the estate, and what closure actually means for directors and shareholders. Three business scenarios – a manufacturing firm, an IT company, and a foreign-owned subsidiary – illustrate where the procedure diverges depending on the debtor's profile.

When does the obligation to file arise – and what does missing it cost?

The filing obligation is binary. Under Polish insolvency law, a company is insolvent when it either cannot meet its financial obligations as they fall due (the liquidity test) or when its liabilities exceed its assets for more than 24 months (the balance-sheet test). Either condition alone is sufficient. The board has 30 days from the moment insolvency arises to file a petition with the competent district court.

Personal liability follows automatically when the deadline is missed. Directors who fail to file on time become personally liable for the full amount of the company's unsatisfied creditor claims – without any cap. That liability cannot be delegated to a CFO or an external accountant. Each board member bears it individually. The National Court Register (KRS) filing history and board resolutions are routinely examined by courts to establish exactly when each director knew, or should have known, of insolvency.

The cost of the petition itself is relatively modest: a court fee of PLN 1,000 applies to most standard insolvency petitions. But the real cost of delay is the personal exposure that accumulates daily. We secured the reversal of a personal liability claim exceeding PLN 3.5m for a manufacturing client in the Mazowieckie region (autumn 2025) – but only because contemporaneous board minutes documented the exact date insolvency was identified and the petition was filed within the statutory window.

Liquidity test: inability to pay debts as they fall due
Balance-sheet test: liabilities exceeding assets for more than 24 months
Filing deadline: 30 days from the moment either test is met
Court fee: PLN 1,000 for most standard petitions
Personal liability: unlimited, attaches to each board member individually

One common misconception is that directors are protected if they resign before the deadline expires. Resignation does not reset the clock. A director who was on the board when insolvency arose, and who resigned on day 15, remains liable if no petition was filed within the 30-day window. The Polish Financial Supervision Authority (KNF) applies a similar principle in regulated-entity contexts. Courts examine substance, not form.

What happens during the first 60 days after filing?

The court's first decision is whether to admit the petition. Under insolvency law, the court must rule within two weeks of receiving a complete filing. If the petition is formally deficient, the court issues a call to remedy defects – typically within seven days. A rejected petition does not stop the 30-day liability clock from having already run. Admission, by contrast, triggers an automatic stay on enforcement proceedings against the debtor's assets.

Within the first 60 days, three parallel tracks open simultaneously. First, the court appoints a syndyk (insolvency trustee) from the official register maintained by the Ministry of Justice. Second, the court determines whether to proceed under the standard liquidation track or to consider a pre-pack arrangement – a mechanism that allows the sale of the business as a going concern to a pre-identified buyer. Third, the debtor's management board loses authority over the estate; the trustee assumes control immediately upon appointment.

The pre-pack route deserves particular attention. It must be applied for at the time of filing the insolvency petition – not afterwards. For an IT company with significant intellectual property and client contracts, the pre-pack can preserve value that would otherwise evaporate during a prolonged liquidation. The buyer is identified in advance; the court approves the transaction price; and the business continues trading without interruption. Timing is everything: a pre-pack filed one day after the main petition is procedurally inadmissible.

During this window, creditors receive formal notification from the trustee. They have one month from the announcement in the Court and Commercial Gazette (Monitor Sądowy i Gospodarczy) to submit their claims. Missing that deadline does not extinguish a claim entirely, but late-filed claims rank behind timely ones in distribution priority. For foreign creditors – including those from Cyprus or Germany – the one-month window runs from the same publication date regardless of domicile.

How does the trustee administer the estate – and how long does it take?

The trustee's mandate is to maximise recoveries for creditors. That mandate translates into three concurrent tasks: inventorying and securing assets, pursuing avoidance actions against pre-insolvency transactions, and preparing a liquidation plan subject to court approval. The inventory alone can take 30 to 90 days for a company with multiple locations or complex receivables. The trustee files progress reports with the court every three months.

Avoidance actions are a significant source of recovery – and a significant risk for counterparties. Transactions completed within two years before the petition date can be challenged if they were made at below-market value or with intent to defraud creditors. Payment of debts to related parties within six months of filing is presumed fraudulent unless rebutted. Directors who authorised such payments face both civil liability and, in serious cases, white-collar defence exposure under the Polish Penal Code.

Our team obtained interim measures protecting assets worth over EUR 4m for a German investor's subsidiary in Lower Silesia (spring 2025), where the trustee had challenged a series of intercompany transfers made in the 18 months before filing. The case illustrates how cross-border insolvency issues – particularly where a Polish subsidiary has a parent in another EU member state – create layered complexity. For more on those dynamics, see our analysis of cross-border insolvency involving Poland and Cyprus.

The liquidation phase itself typically runs 12 to 24 months for a mid-sized company. Real property is sold by public tender. Receivables are collected or assigned. Equipment is auctioned. The trustee then prepares a distribution plan, which the court must approve before any payment is made to creditors. Secured creditors are paid first from the proceeds of their collateral; unsecured creditors share the remainder in a statutory priority order.

What are the costs and where do foreign-owned subsidiaries diverge?

Insolvency proceedings generate several layers of cost. The trustee's remuneration is calculated as a percentage of the estate value – typically between 1% and 3% for mid-sized estates, subject to court approval. Court costs, publication fees in the Court and Commercial Gazette, and expert valuations add further. For a company with assets of PLN 5m, total administration costs commonly reach PLN 150,000 to PLN 300,000 before any distribution to creditors.

Foreign-owned subsidiaries face an additional layer: the question of which jurisdiction's insolvency law governs. Under EU Regulation 2015/848 on insolvency proceedings, the applicable law is determined by the location of the debtor's Centre of Main Interests (COMI). A Polish-registered subsidiary that is genuinely managed from Warsaw will have its COMI in Poland. But a subsidiary whose strategic decisions are made in Berlin or Nicosia may face a COMI challenge from creditors seeking to shift proceedings to a more favourable jurisdiction.

Employment obligations do not pause during insolvency. The trustee must honour statutory notice periods and severance entitlements under the Kodeks pracy (Labour Code). Employees rank as preferred creditors for up to three months of unpaid wages. For companies with large workforces, this can represent a material claim ahead of trade creditors. Directors of foreign-owned subsidiaries are sometimes unaware that Polish employment law continues to apply in full during the insolvency process – for further detail, see our overview of employment law in Poland.

Group structures introduce a further complication. Where a Polish subsidiary has given upstream guarantees or has received intragroup loans at non-arm's-length terms, the trustee will scrutinise those arrangements closely. Liability can migrate upward to a parent company under Polish corporate law in certain circumstances. Our analysis of subsidiary liability in Polish corporate groups sets out the conditions in detail.

What does closure mean – and what checklist should boards use?

Closure of insolvency proceedings occurs in one of three ways. First, the court issues a final distribution order and closes the proceedings after all assets have been liquidated and distributed. Second, the court closes proceedings if the estate is insufficient to cover even the costs of administration – a "no-asset" closure that can occur within months of filing. Third, the court approves a restructuring arrangement under which the debtor repays creditors over an agreed schedule, preserving the business as a going concern.

A restructuring arrangement – available under the separate Prawo restrukturyzacyjne (Restructuring Law) track – can be approved if creditors holding more than half of the total claim value vote in favour. The arrangement binds all creditors in the relevant class, including dissenters. The debtor typically remains in possession of the business during this process, supervised by a court-appointed administrator rather than a trustee. This track is meaningfully faster: an approved arrangement can be confirmed within 12 months of opening.

For boards approaching the 30-day filing window, the following checklist is the minimum preparation required:

Board resolution documenting the date insolvency was identified and by whom
Updated balance sheet and cash-flow forecast prepared by a qualified accountant
List of all creditors with claim amounts and due dates
Inventory of assets with approximate market values
Assessment of whether a pre-pack or restructuring arrangement is viable before filing

Directors who complete this preparation before filing are in a materially stronger position – both in terms of limiting personal liability and in terms of maximising the outcome for creditors and shareholders. The proceedings do not become simpler once the trustee takes control. Preparation done before filing cannot be replicated afterwards.

Every insolvency has an endpoint. The court's closure order discharges the company from remaining obligations (subject to exceptions for fraud). For individual directors, the closure of corporate insolvency proceedings does not automatically discharge personal liability claims that arose from breach of the filing deadline. Those claims survive and can be pursued separately by the trustee or individual creditors for up to three years after closure.

Specific circumstances in your company require assessment before that 30-day window closes – once personal liability attaches, the consequences are irreversible. To receive an expert assessment of your board's exposure and filing options, contact info@kordeckipartners.com.

Frequently asked questions

Q: Can a company avoid insolvency proceedings by entering restructuring instead?

A: Yes – the Restructuring Law provides four separate procedures, ranging from informal arrangement approval to formal accelerated arrangement proceedings. The key condition is that the debtor must not yet be insolvent, or must have filed for restructuring before the 30-day insolvency filing deadline expires. Restructuring leaves management in control of the business under court supervision. It is generally faster and less costly than full insolvency liquidation, but requires creditor support exceeding 50% of total claim value to succeed.

Q: How long do insolvency proceedings typically take, and what are the main cost drivers?

A: For a mid-sized Polish company, the full liquidation track runs 18 to 36 months from petition to closure. The main cost drivers are trustee remuneration (1–3% of estate value), court fees, expert valuations, and the cost of avoidance litigation if the trustee pursues pre-insolvency transactions. A no-asset closure – where the estate cannot cover even administration costs – can be concluded in as little as three to six months. Restructuring arrangements, when approved, typically close within 12 months of proceedings opening.

Q: Does filing for insolvency automatically dismiss the board of directors?

A: Filing alone does not dismiss the board. Dismissal of management authority occurs upon the court's admission of the petition and the appointment of the insolvency trustee. At that point, the trustee assumes full control of the estate. In restructuring proceedings under the Restructuring Law, the debtor typically retains management control subject to court-appointed supervision. Directors remain personally liable for obligations arising before the filing date, and the trustee can pursue them for breach of the filing deadline regardless of whether they have since resigned or been replaced.

KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to restructuring, insolvency, and white-collar defence. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.