A bankruptcy petition generally does not affect the right of set-off. If the creditor is a creditor,
the bankrupt individual may set off their own claim. However,
in certain cases, to prevent the abuse of this right and to protect reputation, set-off is not permitted in the event of bankruptcy. These
cases are as follows:
If, after a bankruptcy petition is filed, the debtor of the bankrupt becomes a creditor of the bankrupt,
I f, after a bankruptcy petition is filed, the creditor of the bankrupt becomes a debtor or creditor of the bankrupt,
If the creditor’s claim is based on a period specified in writing,
In the event of the bankruptcy of joint-stock companies, limited liability companies, and cooperatives, the unpaid portions of share premiums required to be paid under the articles of association, or capital liabilities that have been committed but remain unpaid, cannot be set off against the debts of such companies and cooperatives.
If the bankrupt debtor, knowing that the creditor lacked the capacity to pay prior to the creditor’s bankruptcy petition and acting to the creditor’s detriment, files a claim against the bankrupt with the intent to obtain a benefit for themselves or a third party through set-off, such set-off may be challenged in court. The action to challenge this set-off is filed in the local criminal and commercial court where the bankruptcy decision was rendered.