Slovakia: Is the country's insolvency framework prepared for economic frostbite?

Quick read

Slovakia's economy is facing tough times, with businesses struggling due to global tensions, supply chain problems, and energy costs. The country's important automotive industry is particularly at risk, along with retail, transport, construction, and energy sectors. Insolvencies of Slovak businesses are likely to increase in both number and complexity, but Slovakia's current system for handling these situations isn't ready for what's coming.

Changes to the Slovak Act on Bankruptcy and Restructuring

Slovakia's bankruptcy system has major problems – it's slow, courts are overloaded, and disputes within insolvency proceedings often freeze asset sales for years. The system has two separate tracks for bankruptcy and restructuring, which creates unnecessary delays and burdens. Debtors often file for restructuring to gain time before bankruptcy is declared meaning that creditors have to register their claims repeatedly.

An amendment to the Slovak Act on Bankruptcy and Restructuring has been passed by parliament and took effect on 1 October 2025. Its stated aim is to streamline procedures and resolve practical challenges. The changes focus on reducing some administrative burdens, making electronic filing and service of documents mandatory, and making it easier for creditors to start bankruptcy proceedings. A significant change is the implementation of the new online Insolvency Register for all pre-insolvency, insolvency, and liquidation proceedings. The changes also facilitate the move from restructuring to bankruptcy proceedings when needed.

Looking to the future

These measures will reduce some friction in daily practice, yet they do not address the structural flaws in Slovakia's insolvency system. A surge of distressed companies will soon strain the framework, which, while functioning formally, will not deliver optimal results. The coming economic 'winter' will expose the absence of real reform that is necessary for the insolvency system to be able to mitigate rather than amplify economic shocks.