What are the Consequences of Filing for Bankruptcy?

Bankruptcy declaration refers to the litigation procedure in which the court declares the debtor bankrupt to pay off the debts based on the parties' applications or legal authority. The bankruptcy declaration ruling shall be made in writing. At the same time as the bankruptcy declaration is made, the court shall elect the bankruptcy administrator, determine the period for the declaration of creditor's rights and the date of the first creditor's meeting, and announce the relevant contents of the bankruptcy declaration. After the declaration of bankruptcy, the bankrupt is subject to certain restrictions on personal freedom and certain qualifications in public and private law. If he is not a candidate for public office, his qualifications as a lawyer and accountant are not allowed, and he is not allowed to act as a public limited director or supervisor of limited liability companies And lose the right to manage and dispose of property. Creditors are not allowed to exercise their rights individually and can only be repaid in accordance with bankruptcy procedures. The rights and obligations of other interested parties are also affected by the effectiveness of the bankruptcy declaration. ^[1]

Bankruptcy declaration

The court's bankruptcy declaration of the debtor means that the bankruptcy case has definitely entered.

Procedure for bankruptcy declaration

After examination, the people's court should declare the bankruptcy of the enterprise that meets the bankruptcy conditions. The declaration of bankruptcy shall be made public. Where a creditor applies for bankruptcy, the bankruptcy shall be notified when bankruptcy is declared

Effect of bankruptcy declaration

The making of a bankruptcy declaration ruling is a sign that the bankrupt enterprise has actually begun to enter into liquidation, which indicates that the bankrupt enterprise has already entered a state of bankruptcy. Therefore, the making of the bankruptcy declaration ruling will give

Substantive conditions for bankruptcy declaration

Bankruptcy is a mechanism of the market economy. It is a social phenomenon and a legal phenomenon that will inevitably occur when the market economy develops to a certain stage.

Legal consequences of bankruptcy declaration:

The ruling of the people's court declaring the bankruptcy of an enterprise shall have legal effect from the date of declaration. The legal consequences of bankruptcy declaration are as follows: First, the debtor ceases production and operation activities from the date of bankruptcy declaration. Where it is really necessary to continue production and operation for the benefit of creditors, it must be approved by the people's court. Second, from the date of bankruptcy declaration, a bankrupt enterprise loses its right to manage and dispose of its property, and its entire property is taken over by the liquidation team. The debtor's bank account can only be used by the liquidation team. Thirdly, the liquidation team decides to cancel or continue to perform the contract that the bankrupt enterprise has not performed. Fourth, if the property of a bankrupt enterprise is seized, seized or frozen in other civil proceedings, the people's court that accepts the bankruptcy case shall immediately notify the people's court that adopted the measures of seizure, seizure and freezing to release it, and to the people who accepted the bankruptcy case. The court handled the transfer. Fifth, after the enterprise is declared bankrupt, the people's court shall appoint the necessary left-behind personnel. The legal representative, financial and accounting personnel, and property custodian of a bankrupt enterprise must remain behind. Sixth, from the 6 months before the court accepts the case to the date of bankruptcy declaration, the bankruptcy enterprise's execution of certain legal acts is invalid, such as concealment, private distribution, or free transfer of property; the sale of property at an abnormally low price; Debts provide property security; early settlement of unexpired debts; abandoning their own claims, etc., are all invalid legal acts.

According to Article 38 of the Supreme Court's "Regulations on Several Issues Concerning the Trial of Enterprise Bankruptcy Cases", after the declaration of bankruptcy, creditors or debtors who have objections to the bankruptcy declaration may, within 10 days from the date of the people's court declaring the bankruptcy of the enterprise, to a higher people's court appeal. The people's court at the next higher level shall form a collegial panel to conduct the trial and make a decision within 30 days.

Bankruptcy ruling

Debtor: Xiyuan Plastic Products Factory

Business place: ×× ××× ×××

Legal representative: Huang ××, the plant manager

Regarding the above debtor's 19 ×× year (broken) No. XX bankruptcy application, the court made the following ruling:

The debtor is a bankrupt.

Reasons: Since the creditor XX Chemical Factory No. 1 filed for bankruptcy, the court has determined that all assets of the debtor have income of RMB 13.60 million, and when the bankruptcy application was accepted, the total debt has reached RMB 3.56 million, which cannot be settled. The total debt of the debtor has now increased to 3610000 yuan. After the court accepted this case, after the debtor s superior competent department ×××××× Group Corporation applied for rectification, the debtor and creditor meeting reached a settlement agreement on the date of 19 ×××× month ××. However, during the rectification period, the debtor's financial condition continued to deteriorate, and the creditors' meeting reapplied to end the rectification and declare the debtor bankrupt. The Court affirmed that the application for the creditors' meeting was well-founded, and it applied the provisions of Articles 21 and 23 of the Enterprise Bankruptcy Law of the People's Republic of China (Trial) and made the ruling as above.

At the same time, in this case, in accordance with the provisions of Articles 24, 22, 9, and 14 of the Enterprise Bankruptcy Law, the decision was as follows:

I. Set up a bankruptcy liquidation group, the person in charge of this institution ×××.

2. Claims shall be re-declared. The date of declaration of claims shall be 19 ×× year × month × day to 19 ×× year × month × day; the place shall be the court.

3. The date of the first creditors' meeting after bankruptcy declaration is 19 ×× year × month ×× day; the venue is this court.

4. The date of investigation of creditor's rights is set to 19 ×× year × month × day to 19 ×× year × month ×× day.

×× ××× court ×× (chapter)

Judge: ×××

×××

×××

Year, month, day