Bankruptcy is the recognition of the insolvency of legal entities. If the company is declared bankrupt, all its property will be sold, and the proceeds will be used to pay creditors who have applied to collect debts. After the sale of the property, the company will be liquidated, and creditors who have not achieved debt collection will be forced to declare the debt uncollectible and write it off.
Also, according to the laws of Ukraine, it is possible to file for bankruptcy of individuals. It is important to know that the insolvency procedure is identical for individuals and individual entrepreneurs (FOP). Such debtors are liable for their debts with their own property; therefore, when bankruptcy proceedings are initiated, their property will be sold. However, there are certain limitations here, which are important to be aware of in order to prevent fraud on the part of creditors. This is where an experienced attorney can help.
The Commercial Court carries out the bankruptcy procedure for both individuals and legal entities. After the court has opened insolvency proceedings, an external manager is appointed. Their tasks are the following:
- enter into negotiations with creditors, achieve restructuring and “financial recovery” of the debtor, return to the payment schedule;
- assess the property and prepare for its sale.
The sale of property and the recognition of bankruptcy are carried out immediately after all attempts at negotiations fail. In this case, the Commercial Court must put the debtor’s property up for auction. After the property sale, the money is used to pay off debts. If any amount remains, it is transferred to the debtor. If the proceeds are not enough, only part of the debt is paid off. The remaining debts are declared uncollectible. After being declared bankrupt, the company is liquidated.
Kolt Law Firm offers services for clients who need debt collection or bankruptcy proceedings. Our experts have extensive experience in handling such cases. Kolt lawyers will take all possible actions to restructure debts or resolve the problem out of court. If it is not possible to find common ground, the specialists of our law firm will initiate bankruptcy proceedings against the debtor and control the legality.
Bankruptcy advice.
To get a lawyer’s advice on the bankruptcy of a legal entity or an individual, you can contact us by phone: +380 (73) 404 07 42 ( Viber | Whatsapp | Telegram) or fill out a simple feedback form, and our expert will contact you as soon as possible and advise you.