Insolvency proceedings are initiated when a legal entity or individual is no longer able to meet their financial obligations. The purpose of the process is to liquidate the debtor’s assets and distribute the funds fairly among creditors.
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🏛️ When Can Insolvency Proceedings Be Opened?
The court may open the proceedings if:
– Insolvency – the debtor cannot regularly fulfill due obligations.
– Imminent insolvency – it is foreseeable that obligations soon cannot be met.
– Non-compliance with an approved reorganization plan.
– If the reorganization plan was obtained unlawfully or through fraud.
Insolvency is commonly demonstrated when obligations are not settled for at least 60 consecutive days or if the account is blocked for that period.
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📑 Process Overview
Once proceedings are opened:
1. Creditors submit their claims
2. The debtor’s assets are evaluated and liquidated
3. Funds are distributed proportionally to recognized claims
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🔚 Conclusion of Proceedings
Most commonly, proceedings end with closure due to insufficient assets.
After the decision becomes final:
– The debtor is deleted from the registry.
– Any insolvency annotations are removed.
This marks the end of the legal existence of the entity.
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❓ FAQ
1) Do creditors have to submit their claims?
Yes — without submission, the claim may not be recognized.
2) Can the debtor initiate the proceedings?
Yes — especially in cases of imminent insolvency.
3) What if assets are discovered after closure?
In certain cases, proceedings may be reopened.
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📞 Contact – Legal Assistance
For guidance or representation:
Email: ana@raguzlegal.ba
Phone: +387 63 413 147
Confidential • Professional • Focused on Your Legal Security
