ArmInfo. Armenia is undertaking another attempt to resolve bankruptcy-related issues. During its March 18 meeting, the RA National Assembly Committee on State and Legal Affairs issued a positive opinion on the Bankruptcy Code and a supporting package of related laws submitted by the RA government for first reading.
RA Deputy Minister of Justice Tigran Dadunts, who presented the package, noted that bankruptcy in Armenia is currently regulated in accordance with the Law on Bankruptcy adopted in 2006. Over the subsequent years, the law has undergone numerous amendments. However, research, including with the participation of experts from the Asian Development Bank, has shown that this area requires radical reforms. Reports from businesses indicate that, due to legislative loopholes, bankruptcy is often used to evade tax and loan payments and commit other illegal acts. Instead of rehabilitating bankrupt companies, methods such as dissipation of funds and sale of assets are used. Tigran Dadunts pointed out that since 2024, 5,856 applications have been filed with bankruptcy courts, 4,554 from individuals. In 2025, these figures amounted to 4,733 applications, 3,946 from individuals. Such significant figures indicate that individuals easily obtain loans and then, in order to avoid repayment, easily avoid fulfilling their obligations through bankruptcy.
To prevent such occurrences, the package includes mechanisms under which the courts will have the right to inquire into the financial status of the borrower and review their previous transactions, including the sale of property, which will allow them to determine whether bankruptcy occurred for the aforementioned reasons. If doubts arise, the bankruptcy petition may be rejected, but if it is confirmed, the court will not release the borrower from debt repayment.
Furthermore, the package stipulates that bankruptcy proceedings will not be based solely on unpaid debt. Instead, an attempt will first be made to confiscate assets, thereby eliminating the practice of concluding fictitious contracts to attract financial resources followed by bankruptcy proceedings. Only if the court confirms the existence of debt, can a person be declared bankrupt, and not solely on the basis of the contracts and transactions presented. The documents propose establishing a provision according to which confiscation will not be applied to legal entities, but rather the forced execution of a court order.
All these measures, according to the deputy minister, will help prevent fictitious bankruptcies. Individuals who have driven companies to bankruptcy will have difficulties being appointed to positions as heads of commercial entities, as they will be required to disclose their previous bankruptcy status. The package also includes support measures for companies that wish to repay their existing debt by accumulating financial resources. Instead of three months, one year will be allocated for these purposes. c
