Bankruptcy and pre-bankruptcy proceedings in Croatia: How to navigate the legal labyrinth?

14/10/2023

In the business world, facing financial challenges can result in the need for legal procedures such as bankruptcy and pre-bankruptcy settlement. In order to adequately deal with these challenges, it is important to understand the basics of these procedures and the importance of engaging a bancrupcy lawyer.

Pre-bankruptcy procedure: What you need to know?

The pre-bankruptcy procedure is an instrument that enables the debtor to reschedule his debts in agreement with creditors, thereby avoiding bankruptcy.

Initiation: The procedure initiated by the debtor himself.
Goal: Reaching an agreement with creditors on debt rescheduling.
Duration: Legally defined maximum term.

Bankruptcy proceedings: The last stop for companies in difficulty?

If the pre-bankruptcy settlement does not lead to an agreement or the debtor defaults, bankruptcy may become inevitable.

Initiation: It is initiated by the debtor, creditor or ex officio.
Goal: Liquidation of company assets and settlement of creditors.
Duration: Variable, depends on the specifics of the case.

Why is it wise to hire a lawyer?

Complexity of legislation: Rules change and their interpretation can be challenging.
Representation of interests: Whether you are a debtor or a creditor, the right lawyer is your shield.
Safety in the process: Minimize risks and ensure compliance with all rules.
Negotiation skills: A key element in a pre-bankruptcy settlement.
Expert advice: Understanding all the options and strategies on the table.

Key steps in the pre-bankruptcy procedure

The pre-bankruptcy process is designed as a mechanism that allows companies to recover and get back on track. Here are the basic steps you need to know:

Submitting a request

The first step is to submit a request to the competent court. This request must contain all necessary documents, including financial statements and a list of all debts.

Decision on initiating the procedure

The court will review the documentation and decide on the initiation of pre-bankruptcy proceedings. If the procedure is approved, the company will have a certain period to agree with the creditors.

Confirmation of agreement

The court will review the documentation and decide on the initiation of pre-bankruptcy proceedings. If the procedure is approved, the company will have a certain period to agree with the creditors.

Agreement with creditors

Once an agreement is reached, the court must confirm the agreement in order to make it legally binding.

Bankruptcy procedure: From A to Z

Bankruptcy is a more complex process, but understanding the basic steps can help debtors prepare for what comes next.

Submitting a proposal

It can be filed by the debtor, the creditor, or it is initiated ex officio. The proposal must contain all the necessary information about the debtor’s financial situation.

Decision on the opening of bankruptcy proceedings

The court will consider the proposal and decide on the opening of bankruptcy proceedings. If the procedure is opened, a bankruptcy administrator will be appointed.

Sale of property

The bankruptcy trustee will appraise and sell the debtor’s assets to satisfy creditors.

Payment to creditors

All funds collected from the sale of assets are used to satisfy creditors, starting with those with the highest priority.

Conclusion of bankruptcy proceedings

After the creditors have been settled, the court will issue a decision on the end of the bankruptcy proceedings.

Conclusion: The importance of professional help during pre-bankruptcy and bankruptcy proceedings

Throughout both of these procedures, it is crucial to keep in mind the complexity and importance of each step. Hiring a lawyer can be of invaluable help, ensuring that everything is done according to the law and that your interests are best protected.

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