Originally posted at Cali insolvencias, my other blog.
As this is my first post in English, I beg for your comprehension if a grammar error is committed. Also, if you see a grammar error please leave the comment below.
Colombia’s Código General del Proceso (General Procedure Code) (Law 1564, 2012) establishes the insolvency regimen for non -Trader people (natural persons who don’t develop mercantile acts. And allows debtors to negotiate any type of debt with their creditors in a non-judicial conciliation procedure.
What is it for? According to article 531 of the Codigo General del Proceso, the individual insolvency Law allows debtors to negotiate any type of debt with their creditors in a non-judicial conciliation procedure (similar to America’s Chapter 13). Also, allows debtors to validate private agreements between debtors and their creditors or, eventually, allows debtors to liquidate their personal assets (similar to America’s Chapter 7) as a form of payment (the law also governs the process of liquidation)
What do you need to file for bankruptcy under this regime (Eligibility requirements)?
- Being a Colombian resident, non-trader individual. No regular income is required.
- Having 2 or more debts with two or more creditors in arrears greater than 90 days (no minimum amount of debt is required)
- As an alternative to point 2, individuals must have 2 or more execution (or foreclosure) proceedings against them.
- in both cases, the Individual’s arrears debts must be 50% of the total amount of the individual debt.
Who the Proceeding works?
The individual Insolvency Proceeding starts with debtor submitting an affidavit in a Conciliation Center (Authorized by Ministry of Justice) or a Notary’s Office, serving the area where the debtor has a domicile or residence. The affidavit must file:
1. A report that indicates the precise causes that led to the situation of default. That means that you have to tell the story of your insolvency situation.
2. The proposal for negotiating debts (repayment plan), which must be clear, express and objective. This means that you must indicate how, and how much you will pay. Please note that the applicable commitment period is 5 years maximum, but may be extendable if the debtor and 60% of their creditors agree at the Debt Negotiation Hearing.
3. A list of all creditors and the amounts and nature of their claims (govern in articles 2488 and following of the Civil Code) indicating the name and address of each of them, email address, amount, differentiating Capital and interest, and nature of the credits, interest rates, documents in which they appear, date of granting of the credit and maturity, name, address and address of the office or room of the co-debtors, guarantors or guarantors. In the case of not knowing some information, the debtor should express it. That is, if you do not have all the information (either because you do not remember or because your creditor DID NOT GIVE it (as it happened), then simply state that you do not have it and that you are ready.
4. A complete and detailed list of all of the debtor’s property, including those owned abroad. The estimated values and the data necessary for their identification, as well as the detailed information of the assessments, affectations and precautionary measures that weigh on them, must be indicated and which of them are affected as Family Dwelling and which are the object of an unassembled family patrimony (both are legal concepts that allow debtors to protect their houses from sequestration).
5. A list of judicial proceedings and any procedure or administrative action of a patrimonial nature that the debtor advances or that courses against him, indicating the court or the office where they are filed and their current status.
6. The source, amount, and frequency of the debtor’s income. Or, in case he is an independent worker, a declaration of the same, which shall be deemed rendered under the gravity of oath.
7. A number of available resources for the payment of the repayment plan, discounting monthly living expenses.
8. Information on valid spousal or Common Law Marriage Agreements. In the event in which he has had it, he must provide a copy of the public deed or sentence by means of which it has been settled, or of the sentence that declared the separation of property, if it occurred within two ( 2) years prior to the request. In any of the latter cases, the debtor must attach the goods to the estimated commercial value that were delivered.
9. A discrimination of the food obligations to his charge, indicating amount and beneficiaries. Here they can be both children between the ages of 18 and 25, who do not work and are still studying, and elders.
What are the benefits?
If the conciliator (or the Notary) agrees to review the request for the negotiation of the debts, that decision stops the statute of limitations and suspends the collection of interest, administration charges, and other payments connected to the debts underlying the insolvency procedures, Among other benefits enlisted as follows:
- Stops any execution (or foreclosure) proceedings and forbids creditors to file new proceedings.
- Stops interruption of public services if the debtor has any debt by this concept prior to the presentation of the request. In consequence, any public service interrupted before the presentation of the request must be reestablished.
- Any taxes that the debtor must pay to sell a property will only be paid if it is caused after the acceptance of the request.
- if the debtor complies with the payment agreement reached with creditors, negative credit reports may be removed.
Note: This article uses some sentences used in a similar article about the, already derogated, Law 1380. See the article here: http://www.loc.gov/law/foreign-news/article/colombia-individual-insolvency-law/
This article is informative and is not intended to be a legal advice for any case. For further information about this Law, or for legal advice, please contact me following these instructions (in spanish).
3 respuestas a “What you need to know about the Colombian Individual Insolvency and Bankruptcy Proceeding.”
Perfect doctor, it is well digitized and well focused, some words change, but it is not because this bad written but because in English the words change according to the extender of the sentence. A few months ago I did a 10-sheet essay requested in my research study of the subject, but I have still read several issues about insolvency but have not yet cleared a doubt.
Me gustaMe gusta
Perfect, you are able to hold a whole process in this language. I am wondering if can say any insult in this language to a just graduate (mobles or something like that) lawyers as you usually do.
Me gustaMe gusta
What do you need to know…..
Headline has this mistake among others inside the article.
Well done Dr.
Enviado desde mi iPhone
Me gustaMe gusta