The following parties may apply for bankruptcy of the debtor: the debtor itself, creditors, liquidation obligors, relevant governmental authorities and employee creditors.
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. Debtor
If the debtor meets the conditions for bankruptcy, it may take the initiative to apply with the court for bankruptcy liquidation, reorganization or settlement.
2. Creditors
If the debtor fails to pay off the due debts, the relevant creditors may apply with the court for reorganization or bankruptcy liquidation of the debtor.
3. Liquidation obligors
Where an enterprise legal person has been dissolved but has not been liquidated or the liquidation has not been completed, then at this point, if the assets of the enterprise are insufficient to pay off the debts, the person responsible for liquidation shall apply with the court for bankruptcy liquidation.
Liquidation obligors are usually shareholders or the board of directors of the enterprise.
4. Governmental authorities
If the debtor fails to pay taxes and/or social security premiums, the tax authorities and/or the human resources and social security authorities may apply with the court for bankruptcy of the debtor.
The financial regulatory authorities under the State Council may also apply for reorganization or bankruptcy liquidation of financial institutions.
5. Employee creditors
If the debtor fails to pay employees their wages and other payables, the employees may apply to the court for bankruptcy of the debtor.
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Photo by zhang xiaoyu on Unsplash
Contributors: Meng Yu 余萌
