Best Restructuring & Insolvency Lawyers in Bogotá

About Restructuring & Insolvency Law in Bogotá, Colombia

Restructuring and insolvency law in Bogotá, Colombia addresses the legal processes and mechanisms available to companies and individuals unable to meet their financial obligations. It aims to provide both debtors and creditors with structured ways to manage or resolve financial distress. These laws are designed to either rescue and reorganize financially troubled businesses where possible or, when necessary, to liquidate their assets in an orderly manner. The Colombian legal system offers both judicial and extrajudicial procedures to facilitate restructuring or insolvency, ensuring a balance between creditor rights and the debtor's chance for recovery.

Why You May Need a Lawyer

Navigating restructuring and insolvency procedures in Bogotá can be complex due to the intersection of local laws, commercial interests, and procedural requirements. People and businesses commonly need legal assistance in situations such as:

• Facing mounting debts and unable to pay creditors on time
• Involvement in negotiations with creditors for payment plans or settlements
• Initiating formal reorganization or liquidation processes under Colombian law
• Protecting personal or business assets from aggressive creditor actions
• Handling legal disputes between debtors and creditors
• Navigating cross-border insolvency matters

A qualified lawyer can provide strategic advice, ensure compliance with procedural requirements, negotiate on your behalf, and protect your interests throughout the process.

Local Laws Overview

Colombia’s restructuring and insolvency framework is primarily regulated by Law 1116 of 2006, also known as the General Insolvency Regime. The Superintendency of Companies is the main authority overseeing insolvency proceedings for most private businesses in Bogotá. Key highlights include:

• Reorganization Processes: Designed to help financially distressed but viable companies renegotiate debts and continue operations. Initiated voluntarily by the debtor or by creditors under specific circumstances.
• Liquidation Proceedings: Aimed at companies that cannot be feasibly rescued, entailing the sale of assets to satisfy creditor claims according to legal priorities.
• Extrajudicial Agreements: Debtors can attempt to reach out-of-court settlements with creditors to avoid formal insolvency.
• Creditor Rights: Creditors can initiate proceedings and are involved in decision-making during restructurings.
• Cross-Border Aspects: Certain rules address companies with assets or operations outside Colombia, providing a framework for international cooperation.

Other relevant laws and government decrees may apply, especially in specific industries or during crisis periods (such as measures taken during economic downturns or global events).

Frequently Asked Questions

What is the difference between restructuring and insolvency in Colombia?

Restructuring typically refers to processes that aim to help a distressed but viable business renegotiate its obligations and continue operating. Insolvency encompasses both restructuring and liquidation, the latter being the process of asset realization and business closure when recovery is not feasible.

Who can start an insolvency process in Bogotá?

Both debtors and creditors can initiate insolvency proceedings if the debtor is unable to meet payments. Most often, the process is started by the debtor seeking relief from mounting debts.

What is the role of the Superintendency of Companies?

The Superintendency of Companies oversees and guides insolvency proceedings for private businesses, ensuring that legal protocols are followed and that both debtor and creditor rights are upheld.

What happens to the employees of a company under insolvency?

Employee claims are given preferential treatment in insolvency proceedings. Wages, severance, and social benefits are considered privileged debts and are usually paid before most other creditors.

Is it possible to save my business through the restructuring process?

Yes, the law prioritizes business continuity where feasible. A successful restructuring can result in new payment terms, operational reforms, and a stronger chance of business survival.

Can personal debts be included in insolvency proceedings?

The General Insolvency Regime mainly applies to businesses. However, individuals engaged in commercial activity may also access insolvency proceedings under certain conditions. Consumer insolvency laws exist for individuals not involved in business.

How long does a restructuring process take?

Duration varies case by case, influenced by factors such as complexity, the willingness of parties to negotiate, and court schedules. Typical processes may last from several months to over a year.

What are extrajudicial debt agreements?

These are private settlement agreements between debtors and creditors to resolve financial distress without formal court involvement. They are often quicker and less expensive than judicial proceedings.

How are creditors prioritized during liquidation?

Colombian law specifies a strict order of priority, with labor claims, secured creditors, tax obligations, and unsecured creditors ranked accordingly. Settlement of debts follows these priorities.

Do foreign creditors have rights in Colombian insolvency cases?

Yes, Colombia’s insolvency law recognizes foreign creditors and provides mechanisms for their participation, especially in cross-border insolvency scenarios.

Additional Resources

The following resources and institutions can provide further assistance or information on restructuring and insolvency in Bogotá, Colombia:

• Superintendency of Companies (Superintendencia de Sociedades): Main regulating body for insolvency proceedings of private companies.
• Colombian Chamber of Commerce in Bogotá: Offers advisory services and information for businesses facing financial challenges.
• Colombian Ministry of Commerce, Industry and Tourism: Provides guidelines and updates regarding business regulations, including insolvency matters.
• Legal Aid Clinics: Several universities in Bogotá have legal clinics offering initial guidance on insolvency matters.
• Certified Insolvency Professionals: Registered attorneys and specialists with experience in commercial restructuring and insolvency cases.

Next Steps

If you or your business is facing financial distress or difficulties managing debts in Bogotá, it is important to seek professional advice promptly to preserve rights and explore all available options. Here is how you can proceed:

• Assess your financial situation and gather all relevant documentation on debts and assets.
• Schedule an initial consultation with a restructuring and insolvency lawyer experienced in Colombian law.
• Discuss your circumstances and possible alternatives, including negotiation, reorganization, or liquidation.
• Follow your lawyer’s guidance on preparing the necessary documentation and filing any required legal actions.
• Engage with creditors transparently and in accordance with your legal counsel’s advice to facilitate productive negotiations.

Taking early action and working with knowledgeable professionals increases your chances of finding a sustainable solution and minimizing the impact of insolvency or restructuring on your business or personal financial health.