A creditor may present a petition for bankruptcy to the court if the debtor is insolvent. Bankruptcy (hasan) is a judicial process during which the courts pass all the assets of the bankrupt to an official called the trustee in bankruptcy. Then, the trustee in bankruptcy collects and, if available, sells the bankrupt’s assets so that they may be distributed to the creditors.

Bankruptcy proceedings are applicable both to companies and individuals. A petition may be presented either by a debtor or a creditor. However, the creditor must prove prima facie that the debtor is insolvent.

Bankruptcy is the end of the road for a company; it ceases to exist. Meanwhile, an individual will usually be discharged, free from almost all of the debts, and can start afresh.

Generally, an unsecured creditor is likely to receive little or nothing if the debtor goes bankrupt. Plus, s/he must pay a substantial deposit to cover the costs of the trustee in bankruptcy and also a fee to the court.

For any queries about our insolvency service, please complete our Debt Collection form or contact us at +81 (0)92 287 4640.