The creditor of a trader or a commercial company who is certain that their debtor can no longer meet the financial commitments can file a bankruptcy petition against the debtor.
Who is concerned
Each creditor with unpaid receivable debts can file a bankruptcy petition against a trader or a commercial company.
To be declared bankrupt, the debtor has to meet the following cumulative conditions:
operate under the legal form of a commercial company or be a natural person operating as a trader i.e. someone who exercises acts of trade on a regular professional basis;
have ceased payments, i.e. be unable to pay their debts: having occasional financial difficulties is not enough;
have lost creditworthiness. This may result from an inability to obtain fresh funds in order to pay his debts and bring the cessation of payments to an end, or from the refusal of the creditors to grant an extension to the payment period.
In order to file an allowable bankruptcy petition, the creditor must:
have a claim of a fixed amount (i.e. that is current and undisputable), in an immediately available form (i.e. the amount can be evaluated in an official currency with legal tender) and which must be payable (i.e. due); and
act in good faith: a bankruptcy petition must not be used as a means of intimidation against a debtor as such a petition is likely to harm the reputation of the debtor. It is recommended that creditors take legal action to formally request the court to order the payment of the outstanding amount and then to resort to the services of a bailiff to enforce the court's decision. It is only if the bailiff is unable to recover the receivable debt that the debtor should consider filing a bankruptcy petition.
How to proceed
Filing a bankruptcy petition
Through the intermediary of a bailiff, the creditor can file a bankruptcy petition against the debtor before the competent district court in commercial matters (the competent district court depends on the address of the trader or the registered office of the commercial company).
The debtor is then called to appear on the date set in the summons to defend himself against the bankruptcy petition filed against him.
The creditor must justify the creditor status and prove that the 3 conditions required for a declaration of bankruptcy are met.
The competent court will only declare the bankruptcy on the basis of the information supplied by the parties and if the 3 conditions required for a bankruptcy petition are satisfied.
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