Sometimes filing for bankruptcy ends up being the most sought after solution for anyone who wants to pay off debts and also for those who want to exercise the right to receive.
As it is popularly said, “the company goes badly in the legs”. Their profits are insufficient to pay the employees, the loans let alone their creditors. So, what is the way forward for those who want to pay off debts and for those who want to receive what is entitled?
In these cases, one of the main solutions found is the bankruptcy decree , which can be requested by the owner or partners of the company, as well as by any lender for the purpose of receiving what is rightfully yours. However, it should be noted that the lender, if you want to file for bankruptcy of the company, must have a debt of at least 40 minimum wages to receive.
In addition, if the owner of the company dies, the application for bankruptcy can be made by the spouse or heirs , according to Law 11101 of 2005, known as the Bankruptcy Law.
How is the company in case of bankruptcy?
When bankruptcy is decreed, there will be a forced judicial review and all assets of the company will be used to pay off debts to your creditors, who may be suppliers, banks, officials and government. To ensure that no one is harmed when it comes to getting its share, the Bankruptcy Law defines that division of the value of the equity of the bankrupt company be performed in an equivalent manner among all creditors with outstanding balance.
It is important to note that the owner of the company or partners does not have their individual assets hit. That is, bankruptcy reaches only the legal patrimony. Exceptions are members of joint or unlimited companies, which are subject to the legal effects of bankruptcy.
What are steps after opening the bankruptcy process?
One of the first actions after the bankruptcy proceedings began is the removal of the company’s manager , who is no longer entitled to future collections of the business. The management is made by the “judicial administrator”, who is nothing more than a person chosen by the court judge, who may be a lawyer, an accountant or an economist, for example. Their remuneration also comes from the values of the sale of the bankrupt company.
Next, an analysis of the assets of all the assets (cash in hand, receivables, assets) and liabilities (debts, loans) of the company is performed so that the value of the so-called “bankruptcy” can be determined. The creditors will have the advance maturity of all the credits assigned and the process of interest on the debt will be interrupted until the final outcome.
The owner of the bankrupt company can respond for bankruptcy crime and be impeded from exercising business activity for a period of 5 years.