Provides a legal framework for debt restructuring, liquidation of insolvent businesses, and creditor protection.
This Law aims to address financial distress of businesses and individuals through rescue and liquidation methods.
Debts secured by mortgage or lien take priority over unsecured debts.
Employment contracts remain valid during bankruptcy proceedings and may not be terminated without court permission.
An aggrieved creditor may challenge the trustee's decisions before the Bankruptcy Court.
A financially distressed debtor may apply for bankruptcy protection within 30 days of payment cessation.
The Bankruptcy Court may order appointment of a trustee to oversee and manage the debtor's assets.
Enforcement of judgments and proceedings against the debtor is suspended upon issuance of the protection order.
Priority in asset distribution is given to the debtor's workers and secured creditors.
The debtor and creditors may negotiate a restructuring plan submitted to the Bankruptcy Court for approval.
If the restructuring plan fails or cannot be implemented, the court orders liquidation.
The debtor must fully disclose assets, liabilities, and financial transactions to the trustee.
Debtors who conceal or transfer assets during the distress period face fines and imprisonment.