Insolvency and Bankruptcy

Bankruptcy and liquidation

You are facing a bankruptcy petition filed by a creditor, are considering filing for your own bankruptcy, or need to verify a claim in an already-opened proceeding. Bankruptcy orders the liquidation of the debtor's estate to pay creditors according to the rules set by law.

In one line

Bankruptcy is not the same as reorganization proceedings: here the goal is not to preserve the business but to liquidate the assets and distribute the proceeds. It may be requested by a creditor, filed by the debtor itself, or result from a failed reorganization.

First steps

Documentation of the claim, if you are the creditor filing for bankruptcy
Financial statements and detail of the estate, if you are the debtor
Analysis of defenses against the bankruptcy petition
Title and grounds of the claim to be verified
Inventory of assets subject to liquidation
Determination of priorities and order of payment

What bankruptcy entails

Bankruptcy is the process set out in Law 24,522 aimed at liquidating the estate of an insolvent debtor and distributing the proceeds among creditors according to the order of priorities. With the bankruptcy order, the debtor is divested of its assets, which pass to the administration of the trustee (síndico).

Divestment and the general prohibition on disposing of assets are direct consequences of the declaration. Administration and disposal of the estate rest with the trustee under the judge's supervision, with the aim of realizing the assets in the manner most favorable to creditors.

How bankruptcy is reached

Bankruptcy may be requested by a creditor who proves an enforceable claim and facts revealing suspension of payments, filed by the debtor itself, or declared as a consequence of the failure of reorganization proceedings or an unfulfilled agreement.

Facing a creditor's bankruptcy petition, the debtor has defenses that should be raised in time, such as showing it is not in suspension of payments or depositing the amount claimed. We analyze each scenario to define the best response.

Verification of claims and liquidation

Creditors must file and verify their claims before the trustee in order to take part in the distribution. The process determines the amount and priority of each claim, which sets the order of payment out of the liquidation proceeds.

Once the assets are realized, the trustee prepares the distribution of the estate according to the legal priorities. We advise both debtors and creditors to protect their rights during verification, the realization of assets and the final distribution.

Common mistakes

Failing to respond in time to a creditor's bankruptcy petition
Omitting the verification of the claim and being left out of the distribution
Disposing of assets already subject to divestment
Presenting claims without sufficient cause or supporting evidence
Ignoring the priority regime when calculating expected recovery

Frequently asked questions

Who can file for bankruptcy?

It may be requested by a creditor who proves an enforceable claim and facts revealing suspension of payments, or by the debtor itself. It may also be declared following the failure of reorganization proceedings.

What is divestment?

It is the effect of the bankruptcy order by which the debtor loses the administration and disposal of its assets, which pass into the hands of the trustee for their realization, together with a general prohibition on disposing of assets.

Can I defend myself against a bankruptcy petition?

Yes. The law provides defenses, such as proving that no suspension of payments exists or depositing the amount claimed. It is advisable to act quickly, since the deadlines are short.

How do I collect if I am a creditor of a bankrupt debtor?

You must verify your claim before the trustee to take part in the distribution. Recovery depends on the proceeds of the liquidation and the priority of your claim, and no outcome can be guaranteed.

This page is informational and does not replace professional advice on your specific case. It does not imply any promise of results.

Let's protect your rights

Whether you are a debtor or a creditor in a bankruptcy proceeding, acting in time is decisive. Contact us to assess your situation and define a strategy.

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