What Is a Debt Settlement Letter?

Creditor's rights and debt liquidation refers to the liquidation team's clearing and settlement of various transactions of the liquidated company.

Bond debt liquidation

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Creditor's rights and debt liquidation refers to the liquidation team's clearing and settlement of various transactions of the liquidated company.
Chinese name
Bond debt liquidation
Meaning
Clearing and settlement of various transactions
Types of
Debt settlement
Meaning
Better management
by law
According to the company's liquidation procedures, the liquidation team shall publish a liquidation announcement in two national newspapers at least three times within 60 days from the date of establishment. The first announcement shall be published within 10 days of the establishment of the liquidation group. The liquidation announcement shall specify the name of the company, its domicile, the reason for liquidation, the date of liquidation and the period for reporting claims. The liquidation team must, within 20 days from the date of establishment, notify known creditors in writing to declare their claims. Creditors shall, within 30 days from the date of service of the notice, creditors who have not received the notice shall declare their claims to the liquidation group within 90 days from the date of the first announcement, and submit certification materials regarding the amount of the claims and their guarantees. Failure to report creditor's rights within the prescribed time limit for reporting creditor's rights shall be deemed as abandonment of creditor's rights, but creditors who the company knows and does not notify are not subject to this limitation. If the creditor does not have a valid reason to declare the claim within the time limit for claiming the claim, he may apply for settlement before the distribution of the remaining property of the enterprise is completed. After the creditor declares the creditor's right, the liquidation team shall be responsible for determining the situation of the creditor's declaration, and then notify the creditor in writing. If the creditor has any objection to the verification of the creditor's rights by the liquidation group, he may, in accordance with relevant laws and regulations, file a lawsuit in a people's court within 15 days of receiving the written notice. During the litigation, the liquidation activities involving the distribution of property shall be suspended. As for the settlement of the property mortgage guarantee debt, the creditor can get the priority to settle the amount of the collateral sold, and the insufficient amount is regarded as the company's non-property mortgage guarantee debt. Non-property mortgage guarantee debts shall be settled after payment of employees' salaries and social insurance expenses, payment of various state taxes and fees, return of bank loans and acceptance of corporate bonds. The liquidation team also treats claims and debts that have not matured as due, but deducts corresponding interest. If an enterprise conducts special liquidation due to bankruptcy, it cannot provide guarantee for the original debt without property guarantee within 6 months before liquidation, it cannot pay off the outstanding debt in advance, nor can it waive its claims. In case of the above acts, the liquidation team has the right to file a lawsuit in the people's court, demanding that the property be recovered and incorporated into the scope of special liquidation property. The liquidation team shall promptly recover all the company's creditor's rights and merge them into the company's remaining property or reduce the debt before the end of the distribution of the company's debts. For the creditors' rights that cannot be recovered, they shall promptly explain the reasons to the board of directors and the board of directors shall make a decision. [1]

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