About Restructuring & Insolvency Law in Peru
Restructuring and insolvency law in Peru is designed to help businesses and individuals who are unable to meet their financial obligations. The primary goal is to find a fair and orderly solution for debtors and creditors, whether that means restructuring the company to allow for continued operation, or overseeing the liquidation of assets to pay off debts. Peru has established specific legal frameworks and institutions, such as the Bankruptcy Law and the Commission for Bankruptcy Proceedings (INDECOPI), to support these processes. These laws aim to balance the interests of debtors and creditors, encourage the preservation of economic value, and provide opportunities for businesses in financial distress to reorganize and continue operations where possible.
Why You May Need a Lawyer
There are many situations in which legal assistance is essential when facing restructuring or insolvency. Some common scenarios include:
- You are a company owner whose business is experiencing serious financial difficulties and you are considering formal restructuring or bankruptcy proceedings.
- You are an individual or business creditor who is concerned about recovering money owed from a debtor in financial trouble.
- You need professional guidance on negotiating with creditors, understanding your legal responsibilities, or navigating complex court procedures.
- You are facing threats of asset seizure, lawsuits, or other legal actions by creditors or authorities.
- You want to evaluate the legal risks and options available, such as voluntary restructuring, preventive bankruptcy, liquidation, or other solutions.
A lawyer specialized in this field can help protect your interests, explain your rights and responsibilities, and guide you through the legal process.
Local Laws Overview
The Peruvian legal framework for restructuring and insolvency is primarily governed by the Bankruptcy Law, known locally as the Ley General del Sistema Concursal. The system covers both restructuring and liquidation procedures. The procedure typically starts with a petition that can be filed by either the debtor or eligible creditors. The law provides mechanisms for preventive bankruptcy (before default), restructuring (to attempt business recovery), and liquidation (orderly sale of assets).
INDECOPI (the National Institute for the Defense of Free Competition and the Protection of Intellectual Property) is the regulator that oversees insolvency proceedings in Peru. Important aspects of the law include the automatic stay on creditor actions once proceedings are accepted, the formation of creditors' meetings to decide the company’s future, and the opportunity for debt restructuring plans that allow the company to continue operating when feasible.
The law aims to ensure transparency, protect the rights of all parties, and promote the continuation of viable businesses. It sets out clear requirements for eligibility, timelines, creditor participation, and the distribution of proceeds in liquidation.
Frequently Asked Questions
What is insolvency in Peru?
Insolvency in Peru refers to a legal state where a company or individual is unable to meet their financial obligations as they come due. The law provides structured procedures to manage this situation, which can include business reorganization or asset liquidation.
What is the difference between restructuring and liquidation?
Restructuring is a legal process that aims to help a financially troubled company recover by reorganizing its debts and operations, allowing it to continue business. Liquidation, on the other hand, involves selling off a company’s assets to pay creditors and then dissolving the business.
Who can initiate insolvency proceedings in Peru?
Both debtors and qualified creditors can initiate insolvency proceedings. Creditors must meet certain requirements related to the size and nature of their claim to file a petition.
What is the role of INDECOPI in insolvency proceedings?
INDECOPI acts as the regulatory body responsible for overseeing and managing insolvency cases, ensuring the correct application of the law, taking administrative decisions, and supervising the appointed insolvency administrators.
What happens to ongoing legal actions once insolvency proceedings are started?
Once insolvency proceedings are accepted, an automatic stay comes into effect, which suspends most legal actions, enforcement actions, and asset seizures against the debtor.
Who has priority in receiving payment during liquidation?
The law establishes a specific order of priority. Secured creditors, employees, and certain government claims usually have priority over unsecured creditors. The assets are distributed according to this legally defined hierarchy.
Can restructuring proceedings stop a company from being liquidated?
Yes. The primary goal of restructuring is to avoid liquidation by finding a viable way to reorganize the company and its debts so it can continue operating.
What is a creditors’ meeting?
In restructuring or liquidation proceedings, a creditors’ meeting is a formal assembly of all recognized creditors. The meeting decides on essential matters, such as approving restructuring plans or agreeing to liquidation terms.
Are directors or managers personally liable for company debts in insolvency?
Generally, directors or managers are not personally liable for company debts, unless they have engaged in fraud, mismanagement, or other unlawful conduct, in which case personal responsibility may be established.
How long does an insolvency proceeding usually take in Peru?
The length of an insolvency proceeding depends on factors like the company’s size, complexity of debts, and whether the process is a restructuring or liquidation. It can range from several months for simple liquidations to years for complex restructurings.
Additional Resources
People seeking information or assistance with restructuring and insolvency in Peru may find the following resources helpful:
- INDECOPI (Instituto Nacional de Defensa de la Competencia y de la Protección de la Propiedad Intelectual) - Administrative body overseeing insolvency cases in Peru.
- The Peruvian Judiciary (Poder Judicial) - For information on insolvency-related court proceedings.
- Peruvian Bar Association (Colegio de Abogados del Perú) - Can assist in finding qualified lawyers.
- Chambers of Commerce - Often provide guidance and recommendations for business owners facing financial difficulties.
- Academic institutions and business advisory centers - May offer seminars, documentation, or consultations on financial restructuring and insolvency laws in Peru.
Next Steps
If you are facing potential insolvency or want to explore restructuring options, it is important to consult with a lawyer who specializes in these areas. A specialist will assess your unique situation, explain your legal options, and represent your interests in negotiations or formal proceedings. To proceed:
- Gather all relevant financial documents and communications with creditors.
- Make a list of your outstanding debts and creditor details.
- Contact a legal professional or your local bar association to find a reputable restructuring and insolvency lawyer.
- Prepare specific questions or concerns you want to address during your first meeting.
Taking proactive legal advice early on can help protect your assets, improve negotiation outcomes, and ensure the best possible resolution for your financial challenges in Peru.
Lawzana helps you find the best lawyers and law firms in Peru through a curated and pre-screened list of qualified legal professionals. Our platform offers rankings and detailed profiles of attorneys and law firms, allowing you to compare based on practice areas, including Restructuring & Insolvency, experience, and client feedback.
Each profile includes a description of the firm's areas of practice, client reviews, team members and partners, year of establishment, spoken languages, office locations, contact information, social media presence, and any published articles or resources. Most firms on our platform speak English and are experienced in both local and international legal matters.
Get a quote from top-rated law firms in Peru - quickly, securely, and without unnecessary hassle.
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.
