How to file bankruptcy?
The bankruptcy is an institution that finds its complete and meticulous discipline in the Royal Decree number 267 of 1942, better known as the Bankruptcy Law. You may click this site for more information.
The first article of the bankruptcy law identifies the subjective assumptions: who can fail. Commercial entrepreneurs are subject to bankruptcy proceedings, without prejudice to public officials. Commercial entrepreneurs are better identified in article 2195 of the civil code: they are the subjects that deal with the production of goods and services, intermediation in the exchange of goods, transport, banking or insurance activity and auxiliary activities to these. However, it should not be an agricultural enterprise: the agricultural enterprise is not commercial by definition. Article 1 of the bankruptcy law is without prejudice to certain exceptions to bankruptcy, these are represented by the joint possession (of all) of the following requirements:
- Having had assets less than three hundred thousand euros in the three years prior to the filing date of the bankruptcy petition.
- Having in the same term gross annual revenues not exceeding two hundred thousand euros.
- Have debts that are not even higher for an amount less than five hundred thousand euros.
If you demonstrate that you have owned all three of the aforementioned requirements in the three years prior to filing for bankruptcy, even if you are a commercial entrepreneur, you will not be declared bankrupt.
The objective assumptions of bankruptcy: the state of insolvency
Article 5 of the bankruptcy law identifies the objective assumption. Objective condition is the state of insolvency. The same article gives a deliberately imprecise definition of a state of insolvency, which manifests itself “with defaults or other external facts, which prove that the debtor is no longer able to meet his obligations regularly “.
The rule deliberately leaves ample room for discretion to the judge: a copious jurisprudence has developed on the subject. It is considered, for example, that the state of insolvency cannot be either temporary or transitory, having instead to represent a pathological situation of the company. Legislative Decree No. 169 of 2007 then established that, for the purposes of filing for bankruptcy, the amount of overdue and unpaid debts cannot be less than thirty thousand euros.
Consequences and effects of the declaration of bankruptcy
Having ascertained the existence of the conditions listed above, the court declares the bankruptcy of the entrepreneur. From this derive numerous consequences that can be divided into a patrimonial consequence, consequences on the person of the entrepreneur and the effects of a procedural nature.
- The entrepreneur loses the availability and the administration of all the rights of his own ownership: we speak in this regard of dispossession. The dispossession refers also to the assets acquired during the bankruptcy procedure. The assets of a strictly personal nature are not acquired in the proceeding.
- The acts performed by the entrepreneur after the declaration of bankruptcy have no effect with respect to the creditors. Likewise, all payments made to the bankrupt after the bankruptcy declaration are not effective for creditors.
Effects on the person of the bankrupt
- The bankrupt is obliged to deliver to the bankruptcy trustee also electronic correspondence concerning the reports that are part of the bankruptcy.
- The obligation of the bankrupt to inform the bankruptcy receiver of any changes to his residence or domicile.
- The obligation of the bankrupt to deliver accounting records, budgets and lists of creditors within three days of the declaration of bankruptcy.
- Various hypotheses of failure of the bankrupt. To give an example, the bankrupt cannot be named an executor.
- The bankrupt loses procedural capacity with reference to the relationships that are the object of the bankruptcy. The bankruptcy trustee, on the authorization of the delegated judge, will be entitled to stand trial.
- The sentence produces the interruption ex lege of the processes concerning the relationships included in the bankruptcy.
- The traceability of the bankruptcy revocatory action is legitimate.