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How Do Chinese Courts Examine Bankruptcy Applications?-CTD 101 Series

Thu, 06 Oct 2022
Contributors: Meng Yu 余萌
Editor: C. J. Observer

The examination procedure of the court for accepting bankruptcy cases can be summarized into four stages: applying for bankruptcy, conducting a formal examination, accepting the application, and accepting the bankruptcy case.

This post was first published in CJO GLOBAL, which is committed to providing consulting services in China-related cross-border trade risk management and debt collection. We will explain how debt collection works in China below.

1. Applying for bankruptcy

The applicant applies with the court for bankruptcy.

2. Conducting formal examination

The case-docketing division of the court will docket the case after the formal examination.

3. Accepting the application

The case-docketing division of the court will transfer the case to the bankruptcy trial division for the examination of acceptance conditions, specifically including the applicant’s eligibility, the jurisdiction of the court, the debtor’s insolvency, the causes for bankruptcy, etc.

If the court decides to accept the application, it shall notify the debtor within five days upon acceptance, and the debtor shall raise an objection (if any) within seven days upon receipt of the acceptance notice; the court may organize a hearing if it deems it necessary.

4. Accepting the bankruptcy case

The court shall decide whether to accept the bankruptcy case within 15 days upon receipt of the bankruptcy application or within 10 days upon expiration of the objection period for the debtor. If it is necessary to extend the examination period due to special circumstances, a 15-day extension may be granted upon approval by the court at a higher level.

The court makes a written decision to accept the bankruptcy case, which means the bankruptcy proceedings officially commence.

After the court makes a written decision to accept the bankruptcy case, the decision shall be final and not subject to any appeal. However, after the court makes a written decision not to accept the bankruptcy case, the applicant dissatisfied with such a decision may appeal.



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Photo by iccup on Unsplash

Contributors: Meng Yu 余萌

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