How to know if a company is in bankruptcy: effects, what it is and MORE

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People have aspirations and want to get their project, business or company set up, but sometimes it doesn’t happen as they think. That is to say, they are not in the best moment. For this reason in Spain, in these circumstances they can access a bankruptcy, but you may be wondering How to know if a company is in bankruptcy?

Here in this article we will explain every detail, the steps, the tools and many more about this important topic.

How to know if a company is in bankruptcy?

When a company begins to have solvency problems or has debts that it does not have to make payments. This is the time when the company is not in the best moment. This is why they should be raised as quickly as possible to be in a bankruptcy situation. In order not to worsen the economic circumstances of the corporation.

In this case, we will explain several situations below. In which the company is in bankruptcy and the application has to proceed:

  • The Lack of current liquidity: when within a company you cannot cope with the situation of the debts you have. Or you can’t meet certain payments.
  • When the company does not meet financial commitments.
  • The existence of the embargo. This point can totally harm the company or the debtor. It is common for providers to start judicial claims of the debt.
  • Failure to comply with the obligations of the company: at this point the payment of tax obligations is evidenced for at least 3 months.

But you can also find a voluntary application. That the person responsible for the company is made, which will be presented to the contest in a period of two months. And the forced request, this is due to a request by some of the creditors who are not satisfied with the address.

How to know if a company is in bankruptcy: tools

According to Bankruptcy Public Registry in 2018, at least 4,715 companies in bankruptcy. They should bear in mind that there are several tools that companies find in bankruptcy.

First, you can go to Bankruptcy Public Registry. This record depends on the Ministry of Justice. It is managed by a college of commercial property and real estate registrars in Spanish territory.

That is, they can enter the web portal of the Bankruptcy Advertising and it was created in 2014. There, you can verify all the companies that take part in the contest.

You must bear in mind that resorting to the Public Insolvency Registry. Or look at Official State Gazette (BOE) they can work for bankruptcy cases. However, it does not work if there has been a pre-contest previously.

Another way to find out if a company is in a contest is to ask it. You may be wondering that going to the place and asking that is disrespectful. But you must bear in mind that the person has to look out for their economic interests. In addition, you have the right to know the truth.

Also, you can request a current certificate of Finance and Social Security. With this you can verify the time period in which invoices are usually canceled. It is important to note that this tool is not closely related to the contest. But you can make sure that the company does not have outstanding debts with the Public Administration.

How to Know if a Company is in Bankruptcy: Special Case

It may happen that people call or request you to deliver the certificates. Which corresponds to the payment streams of Finance and Social Security. As we explained, in the previous point, this is not a process that involves the contest. But it helps citizens determine that there is no problem with the Public administration.

Citizens can opt for digital mechanisms. To verify if the company is in a bankruptcy.

That is, they can resort to entering a public entity to resolve the situation. You only have to access the Publicity Bankruptcy web portal.

How to know if a company is in bankruptcy: present it on time

To present it on time, it is a key factor, the right moment that must be presented are the following:

  • When reduce income. That is, when in a company or business, you begin to see that income begins to decline.
  • In the breaches of obligations.
  • When the business has a high debt.
  • When the expiration of the contracts or in their defects concessions.
  • The forecast of regulatory changes in the sector.

Importantly, you have to see bankruptcy as a viable option to consider to save the company.

Effects of Requesting it in my Company

They should bear in mind that the request for creditors is presented before the Commercial Courts, in the province where the debtor is residing. This is an important requirement that the attorney and the attorney attend.

There are positive effects to request bankruptcy in the company, the following can be mentioned:

  • This type of process can help save the business from critical situations.
  • With the application of the contest. Prevents the financial institution from requesting the seizure of the housing to collect the amount of the mortgage. If it is a company, it can work for foreclosures against property.
  • Stops interest earned on loans.
  • There may be the possibility of getting through the Commercial Court, so that they can reduce debt and defer it.
  • You can collect 25% of the credit than the rest of them.

As there are the positives, there are also the downsides to this issue:

In the first instance, this is usually a somewhat expensive procedure, requiring a lawyer or attorney. The second is that the administrator may incur in any case not having acted in accordance with the law.

What is a Bankruptcy?

A bankruptcy is a legal process whose purpose is when a natural person. Or in that case a legal person is in a situation of insolvency in which it cannot meet the debt payments. That is, this bankruptcy covers bankruptcy and suspension of payments.

According to the Spanish legal regulation on this issue, the law 22/2003 on July 9, then it was changed by means of a decree law 3/2009, on March 27.

The latest modification of the law was 9/2015 of urgent measures, which entered into force on May 27. But the current law 1/2020 of May 5, repeals that of 2003.

Phases of the Bankruptcy

There are several phases for them to enter the bankruptcy and they are the following:

Phase 1: Previous Acts

First there is a preliminary phase where it is determined: the budgets of the declaration of the contest and the processes that the declaration of the contest entails.

Phase 2: Common Phase

This phase begins with the request for the declaration of the contest, the judge studies the request and possible application of precautionary measures.

In the second, the judicial resolution declares the bankruptcy or they reject said request. In the third, the active mass that exists in the company is evident.

Finally, a bankruptcy administration report is determined, specifying everything that has been done in said phase.

Phase 3: Resolution Phase

It is important to note that the solutions according to the law, falls on the agreement and in liquidation.

Agreement

The proposals that exist between the debtor and any creditor present are developed. These proposals must include a proposal to remove or wait. That is to say, present a plan.

When they have presented the proposals, the creditors will be able to vote in a meeting. If you get the majority, it can be approved and the judge will accept the agreement.

Settlement

Once the settlement begins. The debtor will lose all management powers. That is, this process consists of selling all the debtor’s assets, in order to cancel the total debt, complying with what the law dictates.

Phase 4: Qualification

This last phase, the final decision of the bankruptcy will be evidenced. Which will qualify if it is fortuitous or guilty. Said bankruptcy is guilty when the debtor has allowed the insolvency situation.

Finally, this measure is good for the company, because it can help you solve internal and external problems. You have to let yourself be helped, and this contest is the best solution for it, to save it.

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