In terms of bankruptcy resolution, Latvia ranks 43rd among 185 countries ranked by the World Bank Group. On average, a debtor from Latvia can recover about 50% of the insolvent creditor's assets in cash after the bankruptcy proceedings are completed. This is slightly lower for creditors from Europe and Central Asia (~40%) and higher for creditors from high-income countries as measured by the OECD (Organization for Economic Co-operation and Development) - ~73%. It may take 1.5 to 2 years to complete all procedures.

As for the outcome for a debtor, Latvian laws provide framework conditions both for sale of assets individually (piece by piece) and for restructuring of the company to operate under a different owner. In practice, however, the reorganization methods are rarely used. More often creditors prefer to sell the assets piecemeal, although consolidation always remains a viable option.

Opening of insolvency proceedings
In the event of bankruptcy, Latvian laws allow both the creditor and the debtor to take action. The debtor can apply for both liquidation and restructuring. However, if the debtor requests reorganization, the creditor can either approve or reject the reorganization plan. The plan can be rejected, for example, if the creditor sees that paying off the bankruptcy debt will take too long. It should also be noted that the decision on the reorganization plan must be approved by all creditors.

If the debtor is reluctant to take action, the creditor can request liquidation but not reorganization. In the end, if the debtor requests restructuring and the creditor liquidation, only one option needs to be chosen. Although the decision is made by the court, the opinion of the creditors is very important – since it is the creditor who has suffered losses as a result of the debtor’s insolvency and insolvency, there have been cases where reorganization requests have been rejected by the court in favor of liquidation, such as it had been proposed to the creditors.

Solution process
The initial phase of the bankruptcy process involves filing for liquidation or reorganization and it can take up to 3 or 4 months to reach an agreement. If the initial application is rejected by a court, a new application must be made, which prolongs the process. Next, there are a number of procedures such as filing a claim, meeting of creditors, etc., which can take up to 10 months depending on the number and content of the actual procedure. Additional months are taken by the sale of assets (in the event of liquidation), and only after that the creditor receives the money.

Bankruptcy claim
A bankruptcy claim must contain the following:

basis of claim
type of claim
amount of the claim
time of application
whether the creditor is recognized as a participant within the meaning of § 72 InsO
Contact information including email address
account number
The maximum period for filing the claim is 6 months from the moment of registration of the opening of bankruptcy proceedings in the bankruptcy register. Nor can it be filed after the confirmation of the insolvency procedural plan. If a creditor fails to meet the deadlines, he is no longer considered a creditor for the purposes of these insolvency proceedings and can no longer claim against the debtor.