Is bankruptcy the end or the beginning. Is there life after bankruptcy for a SME. Lawyers, economists, experts now in Zaragoza Reviewed by Momizat on .   WHAT HAPPENS AFTER THE COMPETITION OF CREDITORS? Companies face a major drama to bankruptcy as it's the end of your business plan as an example of business fa   WHAT HAPPENS AFTER THE COMPETITION OF CREDITORS? Companies face a major drama to bankruptcy as it's the end of your business plan as an example of business fa Rating: 0
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Is bankruptcy the end or the beginning. Is there life after bankruptcy for a SME. Lawyers, economists, experts now in Zaragoza

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WHAT HAPPENS AFTER THE COMPETITION OF CREDITORS?

Companies face a major drama to bankruptcy as it’s the end of your business plan as an example of business failure and personal. This attitude leads to most small businesses, small businesses will not reach this decision until it is irreversible, losing along the way often also personal assets.

This attitude is a mixture of different situations: the Spanish culture that penalizes the failure and does not recognize the ability of struggle and renewal, lack of competition creditors that was done to facilitate the salvation of the company and the costs of bankruptcy proceeding in a fails when the liquidity of the company.

But bankruptcy does not necessarily mean the liquidation of the company, but the reorganization of its debt for survival. For this reason, a number of advantages that favor the company insolvent:

• The firm can can stop foreclosures in bankruptcy

• The company is an obstacle to submit more foreclosures in bankruptcy

• You can stop evictions in rented warehouses and offices

• You can stop foreclosure when you are in bankruptcy

• The company shall be exempt from paying their creditors in bankruptcy for several years, according to agreement.

• You can set the creditors, a deferred payment plan and may agree to a remission of 50% of the amount owed, and sometimes more. This is a clear advantage of bankruptcy

• The interests of the debts were not paid before the bankruptcy pass subordinated claims.

• Debts that the company has stopped producing interests once declared bankruptcy, always referred to debts before bankruptcy

• If the company applying for voluntary bankruptcy is cheaper than bankruptcy requested by creditors.

• And most importantly, avoids bankruptcy disclaimer guilty to the directors of the company and therefore not having to respond with their personal assets.

From the economic point of view, the bankruptcy, the bankruptcy proceedings, gives a strong guarantee to the new provider after the competition, generating confidence in the payment to suppliers who wish to work with the company, and prevents the collapse of society insolvent, as the creditor “against the estate” has priority in the payment for the debts in the “passive mass.”

But when a company is in a position of being unable to pay its suppliers committed a serious breach of the bankruptcy law that may result in the bankruptcy could be considered guilty, with the risk that the company’s debts have to pay Company owners and managers.

If either of the following conditions must be encouraged by law, the bankruptcy:
• When they fail to regularly enforceable obligations.

• When leaving the current payment of debts.

• When there are liens that affect the majority of the estate.

• When behind in the payment of 3 months of Social Security payments, taxes, wages.

• Where it is expected that they will not be able to be paid the debts.

If either of the above, the Act provides that the declaration must be made within the deadline of up to 2 months after learning of the insolvency. This deadline was extended by 4 months as from the communication to the court that they have begun negotiations with creditors to file a proposed agreement in advance.

However, a late entry to bankruptcy is always more favorable than the non-declaration of bankruptcy in order to discharge responsibilities of managers and to rescue the company again.
Without the bankruptcy urges the consequences would be dire, and the later even worse:

• The employer debtor partners and administrators may have to answer to your estate assets to pay all debts of the company. The application of competition is not only a right but an obligation, there is a duty of the debtor to apply for a declaration of bankruptcy within two months from the date you knew or ought to know his state of insolvency. The breach of duty of the insolvent debtor to urge the contest is sanctioned by the presumption of the existence of malice or gross negligence in the creation or aggravation of insolvency, unless proven otherwise, the presumption that, unless rebutted, will lead the score of the competition as the culprit.

• The first property consequences of the sentence is the loss of any rights that the people affected or the accomplices may have as creditors in bankruptcy or mass.

• The second is the conviction to return the property or rights which have been obtained improperly or the debtor’s assets had been received from the bankruptcy estate. The legal provision thus covers all asset movements, both having their origin in the debtor’s assets, prior to the declaration of bankruptcy, as they took place, under the active mass, after the statement.

• The ultimate effect of patrimonial character of the sentence score bankruptcy culprit is sentenced to compensation for damages caused by those affected by the rating.

• Also, the rating of bankruptcy as the culprit may also determine the sentence to the administrators or liquidators of law or fact, and those they obtain this status within two years preceding the date of the insolvency to pay creditors in bankruptcy, in whole or in part, the amount of their claims are not paid in the settlement of the bankruptcy estate. It is called bankruptcy responsibility and the consequences can be devastating to the personal assets of the bankrupt, since the conviction of guilt will force the debtor to pay the loans bankruptcy personal capacity, namely through their private property. It should cover your personal assets resulting deficit of bankruptcy, that is, all loans in bankruptcy have not been paid to creditors by making the active mass of the competition.

• The employer may be ineligible to represent and manage property in the future.

If the bankruptcy described as the culprit would have the following consequences:
• The employer debtor risks losing control of the management company if that encourage competition by a creditor, and thereby makes the future viability of the company.

• The longer you wait to begin the more complicated bankruptcy is the raising of the firm and more difficult to prove the presumption of not guilty fortuitous concourse, especially if the company is generating new loans with the same or other vendors or banks .
But the voluntary bankruptcy is not convened solely because they mark the way Law required, but also because it offers several advantages for the business very interesting.

Maria Jesus Ruiz de Arriaga Remírez.
Lawyer economist bankruptcy.

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