Article 55 of the Bankruptcy Law establishes what the impact of the declaration of bankruptcy must be on enforcement and debt collection. Section 1 of Article 55 establishes as a rule the impossibility of initiating individual enforcements and in Section 2 the precept establishes as a rule that actions in process shall be suspended from the date of the declaration of bankruptcy. All these measures are designed to safeguard the entirety of the debtor's assets and make the collective solution to be reached through the bankruptcy proceedings more efficient.

Exceptions to the aforementioned general rule are labour claim enforcements and administrative debt collections in which the debtors' assets have been seized prior to the date of the declaration of bankruptcy. In these cases, the law allows the individual enforcement to continue, but it is doubly limited.

On the one hand, the debt enforcement can only be carried out with those specific assets that are not necessary to continue with the business activity of the bankrupt company, and for this purpose the ruling of the judge in charge of the proceedings is necessary. And on the other hand, there is a time limitation because the enforcement may be continued only until the moment when the Commercial Court approves the liquidation plan.

It is precisely this time limitation and the interpretation that must be given in relation to the same to Article 55.1 of the Bankruptcy Law that elucidates Sentence 319/2018, of May 30, of the Supreme Court (Civil Chamber, Section 1) adjudicating a claim from the Tax Agency. The Supreme Court ratifies the aforementioned interpretation of the Art 55 in that sense that it does not allow administrative or labour enforcements to continue after the liquidation plan has been approved, in order to guarantee winding up the company and the application of the par conditio creditorum.

Finally, it is worth mentioning that the enforcement of security rights functions in a different legal framework and so Article 55 of the Bankruptcy Law does not apply.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.