The law on consumer bankruptcy has introduced the institute of consumer bankruptcy into the Croatian legal system, which makes it possible for a fair consumer who is insolvent to be exempted from the obligations remaining after the cashing of his assets and the distribution of the collected funds to the creditors. The law provides for three stages of consumer bankruptcy proceedings. The first is an out-of-court procedure in which a consumer has the opportunity to reach an agreement with their creditors on the fulfillment of their obligations. If the agreement is absent, there is a basis for initiating proceedings before the court, which is the second stage and within it there is also a chance to reach an agreement if the creditors accept consumer’s debt management plan. Unless the agreement is reached, the third stage follows, which is the opening of a consumer bankruptcy procedure and the liquidation of a debtor's property within a court proceeding. By ruling on the conclusion of the consumer bankruptcy proceedings, the court determines a period of consumer’s conduct review which can not be shorter than one year or longer than five years. During this period, the trustee is obliged to cash out and distribute the assets of the consumer in accordance with the final divestment list. After the expiration of the conduct review period, the court will issue a decision on exemption from the remaining obligations or a decision to waive this exemption. The aim of this paper is to present the institute of consumer bankruptcy and its implementation in Croatia through a methodological approach which includes studying domestic literature, relevant legislation and statistical analysis, and to answer the question of whether the purpose for which the institute was introduced into the Croatian legal system is fulfilled.