Consequences of insolvency proceedings
- 1. A declaration of insolvency proceedings shall be made in the event of the insolvency of the common debtor.
- 2. A debtor is in a state of insolvency if he is unable to meet his due obligations on a regular basis.
- 3. If the application for a declaration of insolvency is made by the debtor, he must provide evidence of his indebtedness and of his state of insolvency, which may be actual or imminent. A debtor is in a state of imminent insolvency if he foresees that he will not be able to meet his obligations regularly and on time..
- 4. If the application for a declaration of bankruptcy is made by a creditor, it must be based on a title for which execution or seizure has been ordered without the seizure resulting in sufficient free assets for payment, or on the existence of any of the following facts:
- The general suspension in the current payment of the debtor's obligations.
- The existence of liens due to pending executions that affect the debtor's assets in general.
- The hasty or ruinous liquidation of the debtor's assets by the debtor.
- The generalised non-fulfilment of any of the following types of obligations: payment of tax obligations due during the three months prior to the application for insolvency proceedings; payment of Social Security contributions and other jointly collected items during the same period; payment of salaries and indemnities and other remuneration arising from employment relationships corresponding to the last three monthly payments.
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