ba2.png

My company (employer) is getting bankrupt or restructuring

Coming soon.

If after 1 January 2020, out-of-court bankruptcy procedures are carried out, the insolvency administrator shall, no later than the next working day after the expiry of the term for appealing against the decision of the creditors' meeting regarding the approval of creditors' claims, if an appeal has not been brought against the decision of the creditors' meeting, submit a copy of the decision of the creditors' meeting to the administrator of the Guarantee Fund.

A copy of the decision of the creditors' meeting regarding the approval of creditors' claims shall be submitted after having logged in to the personal Sodra account of an insurer and having selected Forms and Templates (Blanks)Applications / complaints / additional informationDPP, 02 Application. Kaunas Division of "Sodra" has to be selected as the addressee.  

Close

If bankruptcy or, after 14 July 2021, restructuring proceedings have been initiated against the employer, the employee has to:

  • apply in writing to the appointed insolvency administrator and submit to him in writing the creditor's claim;
  • submit to "Sodra" an Application for the payment of the benefit from the Guarantee Fund if the employee has not applied an Application for sickness benefit or, in the last 12 months before the date when the insolvency proceedings have been initiated against the employer, the employee has received no social security benefits. An application can be submitted directly online or in "Sodra" division (in lithuanian).

IMPORTANT! If your employer is going bankrupt or restructuring, you will find the appointed insolvency administrator on the website of the Authority of Audit, Accounting, Property Valuation and Insolvency Management.

If the company has become insolvent (bankruptcy or restructuring proceedings are instituted against the employer or out-of-court bankruptcy proceedings are instituted), submit to "Sodra" an Application for the payment of the benefit from the Guarantee Fund if you have not applied so far an Application for sickness benefit or in the last 12 months before the date when the insolvency proceedings have been initiated against have received no social security benefits. You can submit an Application for the payment of the benefit from the Guarantee Fund directly online or in "Sodra" division (in lithuanian).

Close

The "Sodra" is the institution that collects contributions to the Guarantee Fund. The funds accumulated in the Guarantee Fund are allocated to employee benefits, when their employers become insolvent - bankruptcy or restructuring proceedings are instituted against the employer or out-of-court bankruptcy proceedings are instituted.

Close

In the Guarantee Fund, the employer (the policyholder) pays a contribution of 0.16% to employees calculated by the income from which the state social insurance contributions are calculated.

More information on policyholders who have to pay contributions to the guarantee fund >>

In addition to contributions, the Guarantee Fund additionally includes:

  1. Interest and fines.
  2. The funds received from the employers to satisfy the administrator's requirements.
  3. Voluntary contributions from natural and legal persons, other organizations and their departments.
  4. Revenues for the provision of temporary free funds from the Guarantee Fund;
  5. Other legally received funds.

  These contributions are not paid to the Guarantee Fund by the Bank of Lithuania, budgetary institutions, political parties, trade unions, religious communities and communities. Payments from the Guarantee Fund are not made to employees of the said institutions.

 

Close

The employees who started working in the company before the court decided to initiate bankruptcy or restructuring proceedings against the company or creditors began to carry out out-of-court bankruptcy procedures may apply for the benefits from the Guarantee Fund. In this case, it is irrelevant whether the employment relationship continues or whether the employment contract has expired after the court decision was adopted.

If the employees have been employed after the bankruptcy or restructuring proceedings have been initiated, they are not entitled to benefits from the Guarantee Fund.

Close

Benefits from the Guarantee Fund are only granted when the employer becomes insolvent and does not have sufficient own funds to settle with the employees and the amounts of the employees 'claims are approved by a court order or a decision of the creditors' meeting.

Close

An Application for the payment of the benefit from the Guarantee Fund if you have not applied for sickness benefit or in the last 12 months you have not received any social security benefits before the date of the insolvency proceedings against the employer.

An Application can be submitted:

  • Online, after having logged in to your personal "Sodra" account of resident and having selected an Application to pay benefit from the Guarantee Fund, GPS17;
  • By post – the Application form can be found here (in lithuanian). When the application is sent by post, it must be accompanied by a copy of the personal identity document certified in accordance with the procedure established by law (for example, by the Notary Public)
  • In "Sodra" division the Application will be completed by "Sodra" employee who will present it to you for signing. If you choose to go to "Sodra" division:
    • you must bring to the division your personal identity document (passport, Personal Identity Card, the permanent residence permit in Lithuania);
    • you have to know the details of the personal account to which the benefit will be transferred.
Close

In calculating the funds that are allocated from the Guarantee Fund, the amount of the minimum monthly wages, that existed on the day of the adoption of the court ruling to initiate bankruptcy proceedings or the resolution of the creditors' meeting to conduct out-of-court bankruptcy procedures, is applied.

In case the insolvency proceedings are initiated against the employer, a benefit is granted in the amount of the claim approved by a court ruling, but not exceeding an amount equivalent to 6 minimum monthly wages. In out-of-court bankruptcy proceedings, creditors are granted a benefit in the amount of the creditor's claim approved by a decision of the creditors' meeting, but not exceeding the amount of 6 MMA.

In case the liquidation of a legal person is initiated, a benefit in the amount of employment-related income (after tax), calculated for the employee in 3 months before the date when the court ruling has been adopted, but not exceeding an amount equivalent to 6 minimum monthly wages, is granted.

For example, after the employer goes bankrupt or becomes insolvent in 2022, the employee is paid the calculated amount of employment-related income not exceeding 4 380 EUR (730 EUR x 6 = 4 380 EUR)

Close
  • The decision regarding granting (non-granting) the benefit from the Guarantee Fund is taken within 15 working days of the date of entry into the information system of the Fund Board of the final and binding court ruling on creditors' claims or of the ruling on refusal to initiate bankruptcy or restructuring proceedings against an insolvent legal person and on ordering to initiate the liquidation of a legal person at the initiative of the registrar of the Register of Legal Entities.
  • The benefit is paid to your personal account within 7 working days from the date when the decision to grant the benefit has been taken.
  • An extract from the decision regarding granting (non-granting) the benefit from the Guarantee Fund is presented, within 3 working days of the date when the decision has been taken, in the personal "Sodra" account of the resident.
Close

The benefit is not granted if:

  • the debt of the employer that is going bankrupt or restructuring to the employee is not confirmed by a document certifying creditors' claims (by the court ruling or decision of the creditors' meeting);
  • the employees have been granted analogous benefits by the institutions of other Member States;
  • no employment-related income has been calculated for the employees in 3 months before the adoption of the court ruling;
  • the employees have been recruited after the bankruptcy proceedings have been initiated.
Close
Update date: 2022-01-04
Is the information useful?

Can not find what you are looking for? Choose the most suitable option for getting information.