How To Embark On Bankruptcy

The procedure for declaring a legal entity bankrupt rarely begins abruptly. This is usually a large-scale process that requires careful preparation, time and money. Moreover, it is true for both self-bankruptcy, when the company independently declares that it is unable to pay off all the claims of creditors, and bankruptcy initiated by creditors.

All cases on the recognition of companies as insolvent (bankrupt) are considered only by a commercial court and only if there are certain signs, namely:

- a legal entity is unable to satisfy the claims of creditors within 3 months from the date when they should have been fulfilled;

- the amount of overdue monetary obligations in aggregate exceeds or is equal to 300 thousand rubles.

The obligation to file an application on self - bankruptcy also arises when the following circumstances occur:

-       if satisfaction of the claims of some creditors will lead to the impossibility of fulfilling obligations to other creditors;

-       if the foreclosure on the debtor's property will significantly complicate or make impossible the debtor's economic activities.

Who can go to court and when?

1)    The debtor company, unlike other entities, is obliged to apply to the court with a petition for its own bankruptcy within a month after revealing at least one sign of bankruptcy. If the manager of the debtor fails to fulfill this obligation, then he/she shall be personally responsible for all debt obligations assumed by the company from the date when he/she was obliged to file an application and until the date when another creditor did it.

2)    Any creditor has the right to apply to the court with a petition for the debtor's bankruptcy, but only if the previously arisen debt is “wooed” in a separate court case, and the decision on that case comes into legal force.

3)    Credit organization - from the date the debtor has signs of bankruptcy.

4)    Authorized bodies (tax authorities / customs authorities) - after 30 days from the date of the decision to collect the debt.

5)    An employee or a former employee of the debtor who has claims for the payment of severance benefits and (or) for wages - only after the court decision on the dispute with the debtor is effective.

Procedure for going to court:

Those who have the right to apply to the court for declaring the debtor bankrupt must strictly follow the procedure established by law. Otherwise, they may lose their right of the first creditor to choose an arbitration manager, which in the future may negatively affect the entire bankruptcy procedure.

Step One:

Publication of a notice of intent to file a petition for declaring the debtor bankrupt at Federal resource.

The term shall be not less than 15 days, but also not more than 30 days before going to court with an application for declaring the debtor bankrupt.

- and no later than 10 days from the appearance of signs of bankruptcy, if the company intends to declare its own bankruptcy.

The outcome shall be the inclusion of the debtor in the Unified Federal Register of Information on the Facts of the Activities of Legal Entities.

Step Two:

Choose an arbitration manager or SRO, from which the manager will be selected - an irreplaceable figure in a bankruptcy case.

Step Three:

Pay the state duty in the amount of 6,000 rubles and receive the original receipt / payment order, certified by the bank.

Step Four:

Prepare a set of documents and send copies to the parties to the case and directly to the court.

Outcome: if all steps have been performed correctly and on time, then the commercial court must schedule a court session where a decision will be made to open bankruptcy proceedings.

TEAM perfectly knows all the subtleties and complex aspects of the bankruptcy procedure and is always ready to help you at any of its stages!