Filing for bankruptcy 2
One of the major fears among many entrepreneurs and companies is going bankrupt. Sometimes, against better judgment, attempts are made to rescue the situation, often with far-reaching consequences. Postponing the inevitable will only deepen the (financial) hole that a company or entrepreneur is digging. When is filing for bankruptcy the best, or least damaging, solution?
When to file for bankruptcy?
When a company in financial difficulty is no longer able to meet its payment obligations and the prospects are not very promising, filing for bankruptcy with the court is a logical step. Bankruptcy is often inevitable in this situation. A private entrepreneur can decide to file for bankruptcy. Large organizations, such as a private limited company, file for bankruptcy in consultation with their shareholders. The management board must inform the shareholders about the current situation of the company. Only when shareholders agree to the bankruptcy petition during a shareholders’ meeting can the petition be filed.
Who can file the petition for bankruptcy?
An entrepreneur or company can file a bankruptcy petition with the court itself. Creditors too can file a bankruptcy petition against a debtor. There are, however, conditions attached to this. For example, despite reminders, the debtor must have outstanding invoices or other debts and there must be at least two debts to different creditors. The payment term for one of these debts must have expired, making that debt due and payable. To start bankruptcy proceedings, a creditor is obliged to engage a lawyer. Who can file a petition for bankruptcy against a company or organization? • Creditors • The Public Prosecution Service • The management board after approval by the shareholders’ meeting
Can I prevent bankruptcy?
A bankruptcy petition is filed when all possibilities to save a company, or force it to fulfil its payment obligations, have been exhausted. As bleak as a situation may seem sometimes, there are several steps that can be taken to avoid or prevent bankruptcy. Examples include entering into a composition with creditors applying for a suspension of payment, reorganization or refinancing a company. The specialists in bankruptcy law at Fruytier Lawyers in Business will be happy to take a closer look at your company. We can guide you through this difficult and challenging period with sound advice and a committed approach.