On the 1st of October 2008, Act of Financial Operations, Insolvency Proceedings and Compulsory Dissolution introduced a new bankruptcy process into Slovenian legal system – a personal bankruptcy. Before this Act entered into force, natural persons always had to pay off all their debts. Even in the event of their insolvency, they did not have the possibility of a fresh financial start. Personal bankruptcy is a special insolvency proceeding, carried out with the purpose of proportional and simultaneous payment of ordinary claims of all creditors. Unlike legal person, natural person does not cease to exist at the end of the process, so debts that are not paid during the personal bankruptcy, still have to be payed to the creditors after the end of the process. Only optionally, these debts can be discharged during personal bankruptcy. The purpose of the process of discharge of debts is to enable conscientious and honest debtor to terminate his obligations after the expiry of the probationary period and ensure him right to a fresh start.
Since the personal bankruptcy has become an important institute in the Slovenian legal system, questions of its necessity constantly arise in public. This process presents a great financial burden for courts’ budgets and can be abused by resourceful debtors. In order to prevent such abuses, personal bankruptcy has been amended several times with numerous legislative innovations. A number of professional articles have been drafted on the subject of these changes and statistical data on the actual effects of personal bankruptcy has become publicly available. On the basis of all these data, the author of this thesis has presented a detailed legal and economic analysis of Slovenian personal bankruptcy process and its effectiveness. According to the author, the insolvent natural persons should look at bankruptcy as a last resort. The personal bankruptcy process should always strive to find a balance between the conflicting interests of the debtor to obtain relief from debts on one side and the rights of the creditors to be repaid on the other.