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About Bankruptcy Law in Bogota, Colombia

Bankruptcy law in Bogota, Colombia provides individuals and businesses with structured procedures to address situations of insolvency. Known in Colombia as “insolvencia” or “procesos de insolvencia,” this legal framework allows debtors who cannot meet their financial obligations to seek relief and reorganization or liquidation under the supervision of authorities. The goal is to find fair solutions for both debtors and creditors, helping to preserve economic activity and provide opportunities for financial recovery. In Bogota, the bankruptcy process is governed by national regulations but implemented locally through specialized courts and agencies.

Why You May Need a Lawyer

Facing insolvency or bankruptcy in Bogota can be complex and emotionally challenging. You may need a lawyer for several reasons:

  • If you or your business are overwhelmed by debts and unable to pay creditors
  • If creditors are pursuing legal action or threatening to seize assets
  • To understand your rights and obligations under Colombian insolvency law
  • For guidance on reorganization or liquidation options
  • To negotiate with creditors or enter formal restructuring agreements
  • If you need representation before local courts or bankruptcy authorities
  • To avoid criminal or civil liability related to unpaid debts or insolvency fraud

A qualified bankruptcy lawyer can help you navigate the procedures, protect your interests, and improve the chances of a positive resolution.

Local Laws Overview

The Colombian bankruptcy regime is mainly established under the Law 1116 of 2006, which applies to both individuals (under specific modifications and interpretations) and companies. The main features include:

  • Reorganization Process - For businesses or individuals seeking to restructure their obligations and continue operations with a feasible payment plan.
  • Liquidation Process - For winding down operations, selling assets, and distributing proceeds to creditors according to strict legal priorities.
  • Out-of-Court Agreements - Debtors may negotiate directly with creditors and submit agreements for court approval to avoid formal bankruptcy proceedings.
  • Protection Against Creditors - Once insolvency proceedings begin, creditors are generally barred from individual enforcement actions, such as asset seizures.
  • Jurisdiction - Bankruptcy matters in Bogota are handled by specialized insolvency judges and the Superintendencia de Sociedades (Superintendency of Corporations) for corporate cases.
  • Transparency and Good Faith - Full disclosure of finances and good faith negotiations are required throughout the process.

The law provides structured timelines and mandatory participation of creditors, with oversight to ensure fairness and transparency.

Frequently Asked Questions

What is bankruptcy or insolvency in Bogota, Colombia?

Bankruptcy, referred to as insolvency in Colombia, is a legal situation where a person or company cannot pay their debts as they become due. It provides mechanisms for restructuring or liquidation under court supervision.

Who can file for bankruptcy in Bogota?

Both individuals and businesses can initiate insolvency proceedings if they meet the legal criteria of insolvency, such as failing to pay two or more debts for more than ninety days or having multiple legal actions by creditors.

What documents are needed to start an insolvency process?

You need to provide identification, financial statements, list of assets and liabilities, contracts with creditors, and evidence of overdue debts.

Where are bankruptcy cases handled in Bogota?

Corporate bankruptcy cases are mainly handled by the Superintendencia de Sociedades. For individuals and small businesses, cases may also be processed by civil insolvency judges in Bogota.

Can bankruptcy protect me from creditors?

Yes. Once proceedings start, a legal stay is imposed preventing creditors from enforcing collection actions, repossessions, or court judgments during the process.

Will I lose all my assets if I declare bankruptcy?

Not necessarily. In reorganization processes, debtors may retain assets needed to continue business or support basic needs. In liquidation, assets are usually sold, but some essential assets may be protected by law.

How long does the bankruptcy process take in Bogota?

The timeline varies based on complexity. Reorganization can take six months to two years or more, while liquidation may conclude within a year depending on the number of creditors and assets involved.

What happens to my debts after bankruptcy?

Debts are either restructured with new payment terms or, in liquidation, paid from available assets. Remaining unpaid debts may be extinguished according to legal priorities and exceptions.

Is bankruptcy recorded or made public?

Yes, insolvency proceedings are public and recorded in relevant registries, affecting credit ratings and future borrowing ability.

Can I negotiate with creditors before going to court?

Yes. Colombian law encourages out-of-court settlements and agreements, which, if accepted by creditors, can prevent formal insolvency proceedings and offer more flexibility.

Additional Resources

  • Superintendencia de Sociedades - The main supervisory body for corporate insolvency and bankruptcy processes.
  • Colegios de Abogados - Local bar associations in Bogota that can help you find qualified insolvency lawyers.
  • Centros de Conciliación y Arbitraje - Centers offering mediation services for out-of-court debt settlements.
  • Ministerio de Justicia y del Derecho - Government source for information about individual insolvency laws and legal aid.
  • Legal Aid Programs - Public legal clinics and some non-profit organizations provide free or low-cost advice regarding insolvency in Bogota.

Next Steps

If you are considering filing for bankruptcy in Bogota or need advice about handling debts, take the following steps:

  • Gather all financial information, including debts, income, assets, and contracts
  • Document any legal actions from creditors or communication regarding unpaid debts
  • Contact a qualified bankruptcy or insolvency lawyer in Bogota for an initial consultation
  • Explore possibilities for out-of-court settlements with creditors if possible
  • If formal insolvency proceedings are needed, work with your lawyer to submit the required documentation and follow court procedures carefully
  • Attend all hearings and cooperate with the authorities to ensure compliance with the law

Obtaining professional legal advice early in the process can help you avoid costly mistakes and improve your chances of achieving financial stability after bankruptcy.

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Disclaimer:
The information provided on this page is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and relevance of the content, legal information may change over time, and interpretations of the law can vary. You should always consult with a qualified legal professional for advice specific to your situation. We disclaim all liability for actions taken or not taken based on the content of this page. If you believe any information is incorrect or outdated, please contact us, and we will review and update it where appropriate.