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Acquisition of real property from a party which is either insolvent or at risk of insolvency: issues relating to time limits for challenging real property acquisition

A debtor at risk of insolvency often sells or encumbers valuable assets and, by doing so, he or she may prevent their creditors from obtaining satisfaction. Where certain prerequisites are met, the
creditors may challenge the legal actions of the debtor relying on ‘actio Pauliana’ (a complaint to set aside fraudulent conveyance) regulated in Article 527 et seq. of the Polish Civil Code. If a debtor is declared bankrupt, the right to challenge fraudulent conveyance to the detriment of the creditors of assets belonging to the bankruptcy estate is exercised by the trustee in bankruptcy.
The acquirer of real property should be aware of the risk related to the acquisition of real property from a party which is either insolvent or at risk of insolvency. The risk assessment should take into account the sanction of relative ineffectiveness in the areas of civil and bankruptcy law as well as risks posed in the area of criminal law.

