How to file for bankruptcy of a legal entity?

Bankruptcy of legal entities is a serious process that occurs when an enterprise is unable to assume obligations to other persons. This article considers how a person to whom an enterprise has a debt can file for bankruptcy of such an enterprise.

What course of action should a creditor follow to initiate the bankruptcy of a legal entity?

1.Checking the grounds

In order to be able to initiate bankruptcy of a legal entity, it is necessary that the following grounds are met:

• Spoiled solvency. The solvency of legal entities must be damaged or completely lost. This occurs if the costs exceed the setting, which cannot be calculated for debts.
• Confirmed debt to other people. The debt must be supported by the usual accounting and credit documents, indicating that the funds were provided for a certain period.

2. Appeal to the court

After determining the grounds, the creditor must file an application for insolvency with the court. The application indicates the main aspects of the insolvency of the legal entity, describes the circumstances relating to the case.

For filing an application, the creditor is obliged to pay a court fee, as well as the amount of remuneration of the arbitration manager, add evidence of payment of the application. Also, all documents confirming the debt are attached to the application.

The entire package of documents is submitted to the Economic Court at the location of the debtor.

Creditors may submit a comprehensive application to consolidate their claims against the debtor.

3. Consideration of the case in court

After filing a statement of claim, the court considers the bankruptcy case and determines whether the evidence submitted meets the requirements of the law and whether the existence of grounds for declaring the legal entity bankrupt is properly proven. As a result, the court may decide to restore the solvency of the legal entity or declare it bankrupt. In the first case, the creditor receives satisfaction of his claims in a rigid form within a certain period of time. In the second case, the creditor satisfies his interest by selling the debtor's property. To manage the case, an arbitration manager selected by the automated system or an arbitration manager under an agreement is appointed.

4. Restoration of solvency

Creditors approve a rehabilitation plan, according to which the debtor gradually pays off their claims. The rehabilitation plan may provide for the urgent satisfaction of claims or the sale of the debtor's property, as well as other measures capable of restoring solvency.

5.Liquidation

In the event of complete insolvency, the court opens a liquidation procedure, as a result of which creditors receive funds from the realizable assets of the legal entity. After the procedure, the legal entity is declared bankrupt and loses its existence.

If you have a situation in which you act as a creditor in relation to an enterprise that is unable to pay off its debts, simply leave an application on our website. We will be reliable partners in legal support of your case.