A company is said to be insolvent if it cannot pay its debts and does not have enough liquidity. The idea is not to declare bankruptcy, because there are legal procedures to avoid it. If a creditor wants to recover part of the money owed, he can file a bankruptcy petition against the debtor in court.
Insolvency and bankruptcy
It is very important to know the activities to be carried out before the bankruptcy or insolvency of a company. The following text tries to expose the highlights so that people know how to act in a legal way.
Financial crisis: how to deal with it?
When a self-employed person or a company is in debt and does not have enough assets to face it, it is recommended to declare bankruptcy. Why? The advantage is that it stops the garnishment process, as well as the accumulation of benefits. On the other hand, it has the advantage of delaying or even reducing the payment of debts.
Bankruptcy can be filed through the bankruptcy process, however, many companies and individuals are unaware of this concept and how to resolve it. It is a legal procedure designed to resolve difficulties with debts and any lack of liquidity of the company. It then pursues payments that can be recovered by creditors while trying to provide the best solution for business continuity and avoiding bankruptcy.
But when should you file for bankruptcy proceedings? The law is clear on this and whoever or those who think about this exit must be going through a very complex economic problem. Therefore, the goal is to avoid bankruptcy, to purify it without affecting creditors and to keep employees from seeing their limited income.
It is convenient to know that there are two types of bankruptcy filings, which are Voluntary: in this case, the employer or the self-employed in the above-mentioned case is obliged to submit a petition. It has a deadline of two months. The consequences of not requesting it can lead to fines and criminal charges. The judge may assume that the bankruptcy is the result of some dishonorable act.
Convicted person: As the word indicates, the creditor submits a request to the judge because he has not received the debt. The legal representative will deal with the request and decide whether to continue.
The legal path in the management of financial crisis
Many people confuse insolvency and bankruptcy, which are two closely related but fundamentally different concepts.
Bankruptcy: This is the legal tool used to prove it. If the court accepts the charges, the company or individual is protected from creditors. The interest on the debt is frozen and there is the possibility of renegotiating the payments.
Bankruptcy: It is the final cessation of activity and the annulment of the debtor’s assets to pay the creditors.
In the face of a financial crisis, it is necessary to know all the legal details. The goal is to succeed in bankruptcy proceedings, in the sense that specialists in this field can face this task. The most viable option is to hire Oklahoma bankruptcy attorneys in the form of interim administration to manage the bankruptcy proceedings, instead of using them as employees of the company.
This process is defined as hiring experienced employees for a specific situation. It is a flexible option with affordable costs and therefore very beneficial. Obviously, there are many tasks to perform, but experts know that the most important thing is not to involve creditors in the crisis and try to save the company, because it has assets and employees that depend on it.
The staff is fully aware of the various stages of the game and knows that it must obtain the documents submitted with the application. It is important that it is waiting to stop the actions that worsen the entrepreneur, so the main goal is not to declare bankruptcy, although this is a solution, but it is not what we want.
However, these experts in the medium term figure that can achieve continuity of the company in the assumption of outstanding debts. Then, it is better to have experts and succeed in getting out of the crisis.
