Bankruptcy Proceeding

An arrangement with creditors is a legal procedure that arises when a natural or legal person becomes insolvent and cannot meet all the payments due. An arrangement with creditors covers bankruptcy and suspension of payments situations.

There are two types of application for an arrangement with creditors:

• Voluntary application. When the employer voluntarily requests it on becoming aware of the possible insolvency and risk of bankruptcy of the company. If he does not apply for it in time, he is exposed to sanctions, since the judge could think that the bankruptcy was intentionally provoked for some purpose.
• Compulsory application. It takes place when the bankruptcy is brought by a creditor of the company (for example, a worker who is not receiving his salary and goes to court) or by a partner who is not satisfied with the management of the company.

Once the insolvency proceeding is requested in a commercial court, the judge will decide whether it is successful or not. If so, he will appoint an administrator, who will be responsible for negotiating the debts with the creditors in order to settle accounts and be able to pay.

At PROLUCO we have extensive experience in commercial and bankruptcy law, particularly in managing bankruptcy proceedings, insolvency situations and corporate restructuring, advising all types of companies in bankruptcy proceedings.

Why have we specialized so much? Because we like to help companies and when they come out of insolvency proceedings they can continue to operate normally.

Already in the phase of agreement, during the insolvency proceedings, there are many businesses that are paying little by little what is owed and with a quite optimistic perspective.