In times of crisis, many companies experience difficulties in moving forward. This is when they are forced to close down or restructure their debts. In addition, this situation sometimes extends to individuals, who also find themselves unable to meet their obligations. This is where the Insolvency Law becomes important. If you want to understand exactly what bankruptcy law is for, read on.
Let's define insolvency law
This is a branch of commercial law that regulates mechanisms for resolving situations of debtor insolvency, establishing different ways of resolving conflicts. Either through a judicial procedure, with insolvency proceedings, or through out-of-court payment or refinancing agreements.
Opting for extrajudicial channels in time minimises the risks, difficulties and costs derived from a judicial procedure such as insolvency proceedings.
Even so, both in and out of court, in insolvency law it is very important to take decisions in a timely manner. For this reason, it is advisable to turn to professionals specialised in insolvency, with extensive experience and knowledge of the sector. In this way, problems can be anticipated and the best possible solution can be found.
Final objective of insolvency law
With all the aforementioned procedures, the aim is to minimise the detriment to creditors. Likewise, it attempts to provide solutions of viability and continuity for the debtor. By achieving this balance, creditors' chances of recovery are increased and the debtor's economic and business deterioration is reduced.
At Martínez-Sanz Lawyers we are experts in insolvency law. If you need advice, please do not hesitate to contact us. We will be pleased to help you.
