Courts look at substance, not a receipt: what it means for creditors and debtors
The Supreme Court's review of abuse in bankruptcy shows that the court checks whether a debt is real and honestly created. A receipt or a loan agreement is not enough for that.
What happened
In October 2026 the Supreme Court published a review of case law on countering abuse of rights in bankruptcy cases. It covers decisions entered in the court decisions register from 2018 to June 2026. The review shows what courts look at when everything seems smooth on paper but another interest stands behind the debt: artificial disputes, related creditors, a change of address to influence jurisdiction, and use of the procedure to avoid sanctions or write off debts.
My position
I see it this way: in bankruptcy the court assesses not the document but the story behind it. A receipt or a loan agreement is only the start of the conversation. The court may ask whether the money was actually transferred, where it came from and why the debt arose at that moment.
The honesty of the parties is not an abstraction. In cases of individuals, the debtor's good faith is a condition for opening proceedings, and concealing or incompletely disclosing property has consequences. In cases of legal entities, courts look at artificial claims, 'friendly' creditors and transactions used to move property out of reach of enforcement. Such property can be returned to the liquidation estate.
For a conscientious creditor this is support: a real debt is easier to tell apart from an artificial one. For a debtor it is a signal not to build a strategy on formalities.
What to do now
- Confirm the transfer of funds. A creditor should keep statements and payment documents and, if necessary, explain where the money came from.
- Do not hide property or circumstances. A debtor should fully disclose their financial position and explain what the borrowed money was spent on.
- Do not change the address to choose a court. Changing the registered location to influence jurisdiction may be treated as abuse.
- Check counterparties. A business should find out whether there is a link with a creditor whose claim suddenly appeared before the bankruptcy.
This is my professional position, not individual advice: the details depend on the circumstances of the proceedings.