Bankruptcy is a legal state in which a person or entity is unable to pay their debts. Bankruptcy typically involves legal procedures through which assets are liquidated to settle outstanding debts. This may include selling property or restructuring the debts.

Personal Bankruptcy: This occurs when an individual is unable to pay their personal debts. Sometimes, debt restructuring or reductions may be organized.

Corporate Bankruptcy: This happens when a company is unable to pay its business debts. Its debts may be restructured or liquidated through specific legal procedures.

Bankruptcy Procedures:

Primary Objective:

To enable the bankrupt or distressed debtor to reorganize their financial situation so they can resume economic activity and contribute to national economic growth.

Focuses on comprehensively addressing cases involving individuals or entities that are unable to fulfill their debt obligations.

Aims to maximize the value of assets and then sell them in an orderly manner, ensuring fair distribution of the proceeds to creditors in case of liquidation.

Encourages the debtor to return to their activity and achieve economic sustainability, while ensuring creditors' rights.

Legal Mechanism:

Involves liquidating or reorganizing assets within an organized framework, with specific procedures to ensure that the funds obtained are distributed to creditors within a reasonable time.

The process may include selling assets and reorganizing the debtor’s situation to achieve an overall settlement.

Seeks to reduce the cost of procedures and the time required to complete the liquidation or reorganization process.

Target Group:

Includes bankrupt or distressed individuals or companies, regardless of the size of the debt, aiming to handle their financial situations in ways that ensure the best utilization of available assets.

Legal Financial Restructuring:

Legal financial restructuring is a legal procedure that allows individuals or companies facing financial difficulties to reorganize their financial situation by reaching an agreement with their creditors to modify the terms of debt repayment. The goal of this procedure is to assist the debtor in rearranging their financial and economic status without the need for complete asset liquidation or declaring bankruptcy.