Experts hope that people will not rush to declare themselves insolvent in March, when Lithuania's law on personal bankruptcy comes into force, but say that some will probably prefer to file for bankruptcy in neighboring Latvia.
"In Lithuania, the period of bankruptcy procedures is five years, while in Latvia, it could be three years and a half," the paper quoted Saulius Brazauskas, a lawyer, as saying.
"Another difference is that once bankruptcy proceedings are opened against a private individual, he must give part of his income to creditors. In Latvia, it is 30 percent of income, while in Lithuania, it is 50 percent. If a person who has petitioned for bankruptcy earns some money or wins a lottery, he will have to give away half of the money in Lithuania and only 30 percent in Latvia," he said.
Violeta Klyvienė, Danske Bank's senior analyst for the Baltic countries, said that once the law takes effect, banks will be much more cautious in giving out loans.
