Bankruptcy may be divided into arrangement bankruptcy and liquidation bankruptcy. The aim of both procedures is repayment of debt towards creditors. Arrangement bankruptcy consists in the restructurisation of the bankrupt’s liabilities and include them in a repayment schedule, their exchange into stocks or shares. In this case, it is necessary to enter into an arrangement with creditors. The second type of bankruptcy – the liquidation bankruptcy involves appointment of the receiver and complete liquidation of the enterprise. Profits from the enterprise liquidation, i.e. sale of its assets, are intended for the satisfaction of its creditors. The type of bankruptcy declaration is determined by a court, which is guided by the interests of creditors, i.e. assessing in which case their claims may be satisfied to the greater extent.
Published on: 14 December 2016