It is the situation in which a merchant ceases his activity by not having the liquidity to pay his debts. It is a legally regulated situation in which a person or company can not cope with the payments that it must make to its creditors since these are greater than the economic resources that it possesses. That person who files for bankruptcy is called “broken" or “failed."
Bankruptcy is an excellent state in the estate of a natural or legal person, declared in court. The effect of bankruptcy is that the assets of the natural person or juridical person happen to be administered by a trustee of bankruptcies, which will cause the sale of them to proceed to pay the creditors.
When a bankruptcy is legally declared, the company goes to a creditors" contest (or insolvency proceedings) where it is examined whether the estate of the bankrupt can be liquidated with the intention of meeting its obligations. You can inquire more with a bankruptcy attorney in Orlando, FL about this.
One of the main features of bankruptcy, which sets it apart from other situations like the suspension of payments, is the permanent nature of bankruptcy. The payment difficulties will be long lasting, so it is necessary to take measures, we speak of a definitive insolvency.
The entrepreneur goes into bankruptcy, and the cessation of payments to creditors automatically occurs. During that time these creditors cannot take legal actions individually to collect debts and during that time, the bankruptcy proceeds to the sale of its patrimony to face the sales.
In the end, the assets are distributed among all the creditors until the debt is satisfied. Bankruptcy can be fortuitous, guilty or fraudulent. The bankruptcy of a person, whether natural or legal, may be requested by any of its creditors, or by itself.
The debtor who is engaged in a commercial, industrial, agricultural or mining activity is called a qualified debtor and is required to file for his bankruptcy within fifteen days of not having paid a monetary obligation. The main effects of a judgment declaring bankruptcy are as follows:
The disappearance of the failed: The failure of the right to manage their assets is denied. This right passes to the receiver. The rights of all creditors are defined, and all those obligations that are term or subject to some condition may be required. The right of creditors to execute individually the bankrupt is suspended. All pending judgments against the unsuccessful before other courts are accumulated in the bankruptcy trial. All this information can be explained more by a bankruptcy attorney in Orlando, FL.
Some acts of the insolvency made before the declaration of bankruptcy can be left without effect when they have been executed to the detriment of the creditors.