What is the Insolvency Act?
It is regulated by Law 12 of May 19, 2016 – Insolvency Insolvency Proceedings Regime ("Insolvency Act"). As stated in Article 1 "... aims to protect credit and creditors through the reorganization process in order to ensure the recovery and preservation of the company...".
To whom does this law not apply?
3. Entities providing public services during the intervention period of the regulatory body.
What are the processes authorized in the law?
1. Reorganization: The debtor is required to be in a situation of default, impending insolvency or foreseeable lack of liquidity.
2. Settlement: Proceeds when the debtor:
- Cease payment of an enforceable obligation resulting from acts of trade.
- Have three or more executions fought against you, as long as you have not submitted sufficient assets for full payment.
- Hide, leave your business or close your business, without having appointed a representative with sufficient powers and means to fulfill your overdue obligations.
- By any other budget arranged by law.
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