Problematic aspects of covering costs related to insolvency proceedings

The article is dedicated to examining the problematic aspects that arise in practice concerning the formation, execution, and reimbursement of costs associated with insolvency proceedings for small and medium­sized enterprises and developing proposals to address these issues. Special attention is given to the analysis of the current insolvency legislation in Ukraine, identifying its shortcomings in regulating the composition of expenses in bankruptcy cases, the mechanisms for covering these costs, and the determination oftheirfunding sources. The authors argue that the feasibility of applying bankruptcy procedures, an objective assessment of their effectiveness, and the independence of insolvency practitioners largely depend on the provision of adequate financing for the costs associated with insolvency proceedings. The article highlights the specifics of applying bankruptcy procedures in situations where the debtor lacks sufficient assets to cover the expenses associated with the proceedings. The author proposes the introduction of a new simplified liquidation procedure that provides for minimal implementation timelines and reduced costs. Such a procedure has the potential to significantly alleviate the financial burden on debtors and simplify the process for insolvency practitioners. The relevance and necessity of urgently improving the regulatory framework governing the costs associated with insolvency proceedings are substantiated, along with the comprehensive provision of debtors with effective legal instruments to resolve their obligations in a state of insolvency. Based on the conducted research, practical recommendations have been developed for amending the insolvency legislation. These proposalsinclude standardizing thelistof expenses, improving the mechanisms for advancing costs, introducing more efficient methods for covering expenses and ensuring the timely payment of costs associated with insolvency proceedings. Thus, the article aims to contribute to the further improvement of Ukraine’s insolvency legislation, enhancing its effectiveness and ensuring greater legal certainty for all participants in the bankruptcy process.