Bankruptcy law is a specific branch of law that regulates legal relationships arising when a business entity is no longer able to meet its financial obligations. In such cases, a bankruptcy procedure is initiated against the insolvent entity, during which a process of collective creditor settlement is carried out.
Legal Framework of Bankruptcy Law in Serbia
The primary source of bankruptcy law in the Republic of Serbia is the Bankruptcy Law. Depending on the outcome of the initiated bankruptcy procedure, bankruptcy and reorganization can be distinguished.
Bankrupcy
In the first case, bankruptcy refers to the definitive cessation of the existence of a business entity, with the creditors being settled from the value of the bankrupt debtor’s total assets. However, even in bankruptcy, there is an exception where the debtor, as a legal entity, may be sold, and creditors are then settled from the proceeds from the sale of the debtor as a legal entity. This, however, does not lead to the termination of the legal entity as a separate subject of law.
This situation is much rarer in the business practice of the Republic of Serbia compared to when creditors are settled from the value realized by selling the debtor’s assets.
Reorganization
On the other hand, reorganization involves the settlement of creditors based on an approved reorganization plan, which may include redefining debtor-creditor relationships, status changes, or other methods.
Order of Creditor Settlement
Creditors are settled according to precisely defined legal rules, which establish four payment priorities. The first in line for settlement are creditors in the first payment priority, followed by those in the subsequent orders.
In addition to the bankruptcy procedure and payment orders, the Bankruptcy Law defines and regulates various institutes and issues that are characteristic of the specific procedure of bankruptcy. For a correct understanding and interpretation of the regulations, it is advisable to engage a lawyer specializing in bankruptcy law to adequately protect and realize your interests.
Bankruptcy law is undoubtedly a highly demanding and complex legal area where continuous legal support and assistance from an experienced bankruptcy attorney is highly recommended.
Radoičić & Partners Law Firm is specialized in providing legal support throughout all phases of bankruptcy procedures, tailoring its services to meet the specific needs of clients. With extensive experience representing both creditors and debtors, our goal is to ensure the maximum protection of our clients’ rights and interests in accordance with legal regulations.
Representation in Bankruptcy Procedures
We provide comprehensive legal support throughout the bankruptcy process, including document preparation, participation in hearings, and representation before courts. Our team of attorneys ensures that the interests of our clients are adequately presented and protected, whether they are creditors seeking to collect claims or debtors facing bankruptcy challenges.
Legal Advice on Reorganization
Reorganization can provide an opportunity to save a business and redefine relationships with creditors. Our office offers legal support in the preparation and implementation of pre-prepared reorganization plans and other business recovery strategies, in cooperation with experienced financial advisors.
Litigation for Debt Collection
When additional actions outside of the bankruptcy procedure are necessary, our bankruptcy attorneys represent clients in litigation proceedings for the realization and collection of their claims. We ensure a precise analysis of each case and devise a strategy in the client’s best interest.
Preventive Legal Support
In addition to representation, we provide preventive legal advice to help clients avoid insolvency risks and take timely steps to preserve the stability of their business.
Our dedication and expertise allow clients to face bankruptcy challenges with confidence, ensuring the best possible outcomes in each individual case. If you are facing bankruptcy challenges, contact us so we can work together to find the best solution for your situation.
Radoičić & Partners Law Firm has established stable business relationships with numerous companies. By representing our clients, we have frequently dealt with the opening of bankruptcy proceedings against creditors or debtors, which has led our team of attorneys to specialize in this highly demanding legal area. Bankruptcy involves a situation where there are insufficient funds to settle all claims. Therefore, the primary goal of our work is to provide the best possible protection of our clients’ interests and maximize debt collection in bankruptcy procedures.
This protection primarily involves representing the client in bankruptcy proceedings, as well as representing them in litigation proceedings for the realization and collection of claims. Additionally, our law firm can also serve as legal advisors in procedures for pre-prepared reorganization plans. In cooperation with financial advisors, whenever possible, or when the circumstances of a specific case permit, we attempt to implement a recovery procedure for business entities either through pre-prepared reorganization and refinancing plans or through reorganization plans submitted after filing a request to initiate bankruptcy proceedings.
Legal Services We Offer:
- Providing advice and complete legal support in preparing pre-prepared reorganization and refinancing plans, as well as in preparing reorganization plans during bankruptcy proceedings,
- Representing clients in bankruptcy proceedings for the collection of claims,
- Representing clients in litigation proceedings arising from bankruptcy,
- Preparation of Due Diligence reports on non-operational investments,
- Debt collection.
Frequently Asked Questions
A bankruptcy procedure is initiated when a business entity or individual is no longer able to meet their financial obligations. The goal of the procedure is the collective settlement of creditors from the debtor’s assets. It can be initiated at the request of the debtor, creditors, or ex officio if the legal conditions are met.
Bankruptcy refers to the liquidation of the debtor’s assets for the settlement of creditors, which usually leads to the dissolution of the business entity. On the other hand, reorganization allows the continuation of operations through the redefinition of relationships with creditors via a reorganization plan. This is often suitable for business entities with recovery potential.
No. In a bankruptcy procedure, the settlement of creditors depends on the value of the debtor’s assets. Creditors are settled according to the order prescribed by law, but in many cases, the funds are not sufficient to fully satisfy all creditors’ claims.
Yes, but in the Republic of Serbia, bankruptcy for individuals is not the same as for business entities. For individuals, there is a personal bankruptcy procedure, which allows for the reprogramming of debts or partial debt forgiveness. This procedure has specific conditions and regulations. Personal bankruptcy is not permitted in the Republic of Serbia.