Companies sometimes go through periods of distress and crises as a result of the risks surrounding them, which sometimes lead them to consider filing for bankruptcy. The declaration of is considered as a solution for the debtor to get rid of her/his debt, and for the creditor to recover her/his money. However, such a solution has to be the last choice which is used by the debtor to solve her/his stops paying problems, but why is that? And why it is better for debtor companies to reconcile with their creditors and solve problems related to debts in consensual ways? In other words, why should indebted companies avoid bankruptcy?
LOSS OF CONTINUITY
The bankruptcy system was designed with the primary goal of restoring rights to creditors of corporations or traders who stopped paying their debts. In order to achieve this goal, it is necessary to dismantle the debtor company's business, by selling its assets and paying off its debts. For this, it is necessary to terminate some (...) Read more? Sign up for free
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