Bankruptcy Lawyers in Portugal - English-Speaking Local Attorneys
Bankruptcy Lawyers in Portugal
Updated on Tuesday 26th September 2023 Rate this article
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Bankruptcy in Portugal is declared when the existing company can no longer pay its debts. Basically, a company's insolvency occurs when it no longer has enough funds to operate in the market. There are a number of procedures that come to the attention of our bankruptcy lawyers in Portugal who can handle the formalities involved.
| Quick Facts | |
|---|---|
| Bankruptcy in Portugal (definition) | Legal process for individuals and businesses unable to pay debts. |
| Types | Personal bankruptcy, business insolvency, special regime for farmers |
| Filing process | File a declaration of insolvency at a court with the help of our bankruptcy lawyers in Portugal. |
| Creditors' meeting | Creditors assess the debtor's financial situation and propose a plan. |
| Debt restructuring plan | The debtor proposes a repayment plan; creditors' approval is needed. |
| Assets liquidation | Assets may be sold to repay creditors. |
| Debts not discharged | Student loans, certain taxes, fines, and obligations from fraud |
| Implications for business | Businesses may continue operations under supervision during insolvency. |
| Insolvency administrator | Appointed to oversee the debtor's assets and financial situation. |
| Debt renegotiation | Possible during the insolvency process to adjust repayment terms with the assistance of our insolvency lawyers in Portugal. |
| Avoiding bankruptcy | Seek financial advice from our bankruptcy lawyers in Portugal and explore debt restructuring options. |
| Bankruptcy Register | Public record of insolvency declarations and proceedings |
| No criminal sanctions | Bankruptcy in Portugal is not a criminal offense. For more information, consult our bankruptcy lawyers in Portugal. |
| International implications | Cross-border insolvency governed by EU regulations and treaties |
| Legal support importance | Legal assistance from our bankruptcy lawyers in Portugal is highly recommended when navigating bankruptcy. |
Bankruptcy proceedings in Portugal
An economic and financial report will be drawn up before declaring the bankruptcy of a Portuguese company. It will highlight the company's existing financial assets. Here is a general description of how to file for bankruptcy in Portugal.
- If the company cannot pay its obligations and debts, then it can go into insolvency.
- The bankruptcy process can start if after 30 days the company is up to date with payments.
- An insolvency plan is being prepared, and one of our bankruptcy lawyers in Portugal can handle the formalities involved.
- The intention to declare insolvency is then presented before the court. This will require a liquidator to handle the insolvency proceedings.
The court responsible for bankruptcy proceedings in Portugal is typically the one in the location where the company's registered office is located or where its primary business activities occur. If such a court doesn't exist, then the court of the debtor's domicile or registered office has jurisdiction.
If the court declares the company bankrupt through a judgment, a liquidator is appointed. The liquidator's responsibility is to sell off the company's assets, converting them into funds that can be distributed among creditors. This liquidation process usually takes place within a six-month period.
It is important to note that the various expenses and costs incurred during the course of handling the insolvency proceedings, such as legal fees, administrative expenses, court fees, and other related costs, are treated as financial obligations that are owed by the entity undergoing insolvency.
Why initiate bankruptcy in Portugal
Bankruptcy in Portugal involves evaluating the financial state of the company. The company might be insolvent, which means it can't fulfill its obligations due to insufficient funds and limited access to credit. Its assets might not be enough to cover its liabilities. Alternatively, the company could be facing financial difficulties preventing it from meeting its obligations.
Creditors also have the authority to initiate bankruptcy proceedings against the company, if it's economically incapable of resolving its financial issues. This can happen if the owners flee or abandon the business's registered office or if the company's assets are being depleted or lost. Additionally, the Public Prosecutor's Office can open bankruptcy proceedings for the same reasons. Our bankruptcy lawyers in Portugal can help you in this situation.
Bankruptcy proceedings can be initiated against natural persons, legal and commercial entities, associations, and more.
However, exemptions might be applied to public legal persons, corporate public entities, insurance undertakings, credit institutions, financial corporations, and others due to their specialized nature or unique regulatory arrangements. Our Portuguese lawyers can help you in these exceptional cases.
What should the company's managers and administrators do in case of insolvency?
The board of directors of the company has the legal obligation to submit the declaration of insolvency, which is previously entrusted to the management of the company. In other words, directors must subject the company to insolvency proceedings just before the maturity of the debts. This can happen if the directors have reason to believe that the company will not be able to meet its financial obligations in the future.
You can find out more about the insolvency proceedings and the obligations of the administrators of a company from our bankruptcy lawyers in Portugal.
Other insolvency proceedings in Portugal
Every creditor has the right to bring an action to restore rights. This can be done either by invoking new facts or by requesting the analysis of relevant evidence that has not yet been considered or presented to the court. Also, the liquidation and distribution of the insolvent mass may be suspended and postponed, except in the case where there are goods subject to depreciation or damage.
Moreover, the suspension may also occur if one of the creditors of the bankrupt company files an appeal against the decision to declare insolvency.
It is important to note that if the action for restitution of rights and the appeal against the declaration of insolvency continue, the declaration of insolvency may be revoked. There are many cases in which this phase can delay the insolvency process for at least 6 months. More about bankruptcy in Portugal can be discussed with our attorneys.
Managing and selling assets
The insolvency administrator is authorized to utilize and manage the assets belonging to the insolvent’s collection of assets, according to the relevant insolvency law (Code of Business Insolvency and Recover). You can appoint our Portuguese bankruptcy lawyers as administrators to handle this process.
Selling the assets of the insolvent firm is a crucial step for fulfilling the claims of creditors. The responsibility for this lies with the insolvency administrator, who has the discretion to choose the manner in which the assets are sold. The administrator's decision-making regarding the sale method is unrestricted.
Unless the creditors voice their disagreement or reservations about selling the assets, the insolvency administrator proceeds with selling the assets to generate funds that can be used to repay the debts owed to creditors.
Our law firm in Portugal offers legal services in cases involving managing and selling assets.
Why is a bankruptcy lawyer needed in Portugal?
Bankruptcy in Portugal can be a difficult process that can take a long time. A bankruptcy lawyer in Portugal can handle the formalities and explain the existing procedures, according to the law. You can rely on the experience and professionalism of our bankruptcy lawyers in Portugal if you are interested in this case.
Individuals interested in discovering more details about bankruptcy in Portugal can find these statistics useful. The information was issued by the National Statistics Institute Portugal in 2022:
- There were 1,598 bankruptcies or insolvencies of companies issued by the courts of first instance;
- Compared to the year 2015, there was a reduction of 62.4%;
- The number of bankruptcy cases in Área Metropolitana de Lisboa accounted for 24.7% of all bankruptcies in that year. Our Portuguese lawyers can offer assistance in Lisbon as well;
- The lowest number of bankruptcies (365) was recorded in the 3rd quarter of 2022;
- The sectors of Trade and Industry and Energy combined accounted for 44.3% of the total bankruptcies.
Want to know more about bankruptcy in Portugal? Contact our law firm in Portugal and discover our legal services. Specialized advice can be offered to those who want to start a business in Portugal.
