Protection of creditors’ rights in bankruptcy

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Oleksandr Kolesnichenko

Head of real estate and construction practice

Construction and real estate specialist, civil engineer, specializes in land law, negotiations, and pre-trial dispute resolution.

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Protection of creditors’ rights in bankruptcy

Bankruptcy is a complex legal process that can have a significant impact on all stakeholders, including creditors. It is important for creditors to understand their rights and know how to protect them in the bankruptcy process.

Who are creditors?

Creditors are individuals or legal entities to whom the debtor owes money or property. Their requirements may vary, including:

  • Debts for goods, services or works: for example, for goods purchased, services rendered, works performed.
  • Loans: for example, bank loans, loans from friends or acquaintances.
  • Wages: If the employer has not paid the wages to the employees, they become his creditors.
  • Tax obligations: if the debtor has not paid taxes, the state becomes his creditor.
  • Court decisions: if the court has decided to collect a certain amount from the debtor in favor of another person, this person becomes his creditor.

It is important to understand that not all debt obligations make a person a creditor. For example, if you loaned money to a friend and did not document it, then you will not be able to demand its return through the court.

To be a creditor, you must have:

  • Confirmation of the debt: it can be a contract, invoice, invoice, court decision, etc.
  • Debt repayment term: the debt must be overdue, that is, the debtor has not fulfilled his obligations on time.

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The order of satisfaction of creditors’ claims in bankruptcy

In Ukraine, the order of satisfaction of creditors’ claims in the bankruptcy process is regulated by the Code of Ukraine on Bankruptcy Procedures (hereinafter – KUzPB). According to Art. 64 of the Labor Code, creditors’ claims are satisfied in the following order:

Primary requirements:

  • Expenses related to the conduct of the bankruptcy case (remuneration of the arbitration manager, expenses for publication of advertisements, etc.).
  • Payment of wages and severance pay to the debtor’s employees.
  • Claims secured by a pledge (mortgage).
  • Current claims (claims that arose within 3 months before the date of filing the bankruptcy petition).

Secondary requirements:

  • Requirements secured by a guarantee.
  • Claims for compensation for damage caused as a result of damage to health or property.
  • Requirements for the payment of alimony.
  • Other unsecured claims.

It is important to note that:

  • Within one turn, creditors’ claims are satisfied in proportion to their size.
  • If several creditors claim the debtor’s property, which is the subject of a pledge, their claims are satisfied in order of priority of pledge rights.
  • Current requirements are met only if there are funds left over after priority requirements have been met.

Support of the company “Prykhodko and partners” in the matter of protection of creditors’ rights in case of bankruptcy

The company “Prykhodko and partners” is a team of experienced lawyers who specialize in many issues, including bankruptcy cases. We offer comprehensive assistance to creditors at all stages of the bankruptcy process, including:

  1. Analysis of your accounts payable. We will carefully study your situation and determine the most effective strategy for protecting your rights.
  2. Preparation and submission of the debtor’s bankruptcy petition. We will help you correctly prepare and file a bankruptcy petition with the court.
  3. Participation in creditors’ meetings. We will represent your interests at creditors’ meetings and defend your rights before the debtor and other creditors.
  4. Challenging the actions of the debtor or the arbitration administrator. If you believe that your rights have been violated, we will help you challenge the actions of the debtor or the arbitration administrator in court.
  5. Debt restructuring negotiations. We can help you negotiate with the debtor to restructure the debt so that you can get your money back.
  6. Representation in court. We will represent your interests in court at all stages of the bankruptcy case.

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Why should you choose the company “Prykhodko and Partners”?

  1. Experience and knowledge. We have many years of experience in conducting bankruptcy cases and know all the nuances of this process.
  2. Individual approach. We approach each client individually and develop a strategy for protecting his rights, taking into account all the circumstances of the case.
  3. Professionalism and responsibility. We guarantee you a professional and responsible approach to your case.
  4. Transparent prices. We offer fair and understandable prices for our services.

Contact the company “Prykhodko and partners” to receive qualified legal assistance in the matter of protecting your creditor’s rights in bankruptcy.

If you need advice or want to know the cost of protecting the rights of creditors in bankruptcy – fill out the form below.

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Oleksandr Kolesnichenko
Head of real estate and construction practice

Construction and real estate specialist, civil engineer, specializes in land law, negotiations, and pre-trial dispute resolution.

Contact now
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