Insolvency proceedings are a great challenge, both from a business and a private point of view. In order to be able to handle the proceedings as uncomplicated as possible and so that nothing stands in the way of a new beginning, we support you in every phase of the insolvency proceedings with our legal advice.
What are the types of insolvency proceedings?
First of all, a distinction must be made between private insolvency and corporate insolvency. However, this difference has only a limited effect on the course of the proceedings. As an entrepreneur, you are subject to a higher documentation obligation and, in addition to the general documents, you must submit further documents such as annual financial statements and the management reports and audit reports of the last three years.
The distinction between voluntary and necessary insolvency proceedings is much more serious. Voluntary insolvency proceedings are those initiated by the debtor himself. In this case, it is a matter of submitting the necessary documents in order to have the insolvency determined by the court. Necessary insolvency proceedings are initiated by another party (e.g. a creditor). In such a case, the procedure is much more complex, as the debtor should be enabled to deny the insolvency and thus prevent the insolvency proceedings.
How do insolvency proceedings work?
The insolvency proceedings are divided into three stages. The first, so-called declaratory phase, begins with the application for insolvency. In this phase, it is a matter of submitting the necessary documents so that the court can declare the insolvency with an order. This is followed by the second phase, the so-called joint phase, in which the insolvency estate and liabilities are determined. In the third phase, the so-called dissolution phase, the insolvency situation is resolved either by consent and fulfillment of an agreement with the creditors or by liquidation of the debtor's assets.
What steps must be taken in order to file for insolvency?
In order to initiate voluntary insolvency proceedings, a petition must be filed with the competent court. The commercial courts are responsible for insolvency proceedings - regardless of whether the petitioner is an entrepreneur or a private individual.
The application must be received by the court in due time. The application deadline is regulated by law and is two months from the date on which the inability to pay is known.
was or should have been known. This deadline was temporarily suspended by special and transitional provisions enacted by the Spanish Parliament in the context of the Covid 19 pandemic. In the meantime, however, the transitional regulations have expired, so that the two-month deadline applies.
The insolvency petition must be filed by a lawyer according to a lawyer's model and signed by both the debtor and the lawyer. The application must be accompanied by documents necessary to prove the existence of insolvency. The law prescribes which documents are to be included. These include a report on the economic and legal development of the debtor (especially in the last three years), an inventory of assets and a list of creditors and liabilities.
How does the process continue after the application is submitted?
After the application has been filed, the law provides for a period of two days within which the court examines the application and, if necessary, opens the insolvency proceedings by means of an order.
