If you have a monetary claim against a firm that faces bankruptcy, you enjoy certain forms of protection.
A firm owes you money but it has suspended payments and therefore cannot pay you. The law generally provides for two possibilities in this case:
- Either the firm can be saved; in this case, it will be placed under administration by a court order. The purpose of this procedure is to safeguard the firm, keep its business going, preserve jobs and sort out the liabilities, or
- the situation is so serious as to justify winding the firm up, which is bankruptcy in layman's language.
In both cases, as soon as the court has taken its decision, creditors can no longer proceed individually against the firm. The aim of this principle is to ensure that all creditors are on an equal footing and to protect the debtor's assets. To be paid, you must now prove your claim against the person - generally known as the administrator or liquidator - who is responsible for reorganising or liquidating the debtor's assets.
In order to make it far more difficult for a debtor to avoid having to pay his/her debts by transferring assets from one Member State to another, the Regulation on insolvency proceedings was adopted.
To obtain more detailed information please click here (you will be redirected to the dedicated page of the European Judicial Network in Civil and Commercial matters).
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Last update: 23/10/2012