Section 407. Failure to petition for debt settlement proceedings or bankruptcy

A penalty of a fine or imprisonment for a term not exceeding two years shall be applied to an insolvent debtor who intentionally or through gross negligence fails to petition for the institution of debt settlement proceedings pursuant to the Bankruptcy Act or for bankruptcy, if
  1. a.
    such omission means an operation or attachment cannot be annulled, and this considerably impairs the creditors' prospects of obtaining payment, or
  2. b.
    the debtor's business is clearly loss-making, and the debtor must realise that he/she will not be able to provide the creditors with settlement in a reasonable time.
However, failure to petition for debt settlement proceedings or bankruptcy is not punishable if the debtor acted in agreement with creditors who represent a substantial share of the total debt as regards both amount and number.