Gloss on the Resolution of the Supreme Court of 4 April 2023, III CZP 11/22

Abstract

This commentary on Supreme Court resolution III CZP 11/22 aims to address the question of whether a mortgage on a third party’s property should be extinguished upon cancellation of the bankrupt’s debts. It deals with the accessoriness of a mortgage and its role, as well as the admissibility of making a mortgage serve other purposes sanctioned by the legislature in the Bankruptcy Act. The commentary analyses the nature of the debt cancellation mechanism and the extent to which the solution proposed by the Supreme Court is compatible with the normative aim of the regulation, which is to seek creditor satisfaction. It also discusses the potential consequences of applying the judgment in practice, including the weakening of the function of a mortgage and of the position of the creditor, and the risk of abuse by debtors. Reference is also made to the impact the judgment may have in the context of conditional debt cancellation in bankruptcy proceedings.