Existing user? Sign in
Share your needs with us, get contacted by law firms.
Free. Takes 2 min.
Restructuring and insolvency law in San Gil follows Colombia's national legal framework but is administered through local courts and administrative offices that serve the Santander region. When a company or an individual cannot meet their financial obligations, Colombian insolvency procedures provide two main pathways - reorganization aimed at preserving the business and maximization of creditor recovery, and liquidation when reorganization is not viable. Procedures are governed by national statute, supervised by national regulatory bodies, and implemented through judges and court-appointed administrators in the local judicial circuit.
You should consider hiring a lawyer when facing potential or actual insolvency because the law and court practice can be complex, time-sensitive, and consequence-heavy. Common situations that require legal help include:
- A business unable to pay suppliers, lenders, payroll, taxes, or social security contributions.
- Receipt of formal demand letters, precautionary measures, attachment orders, or enforcement actions from creditors.
- A large creditor threatening to initiate liquidation or to force assets into auction.
- Complex creditor structures with secured creditors, preferential creditors, and multiple classes of claimants.
- Need to negotiate out-of-court restructuring or reach a formal reorganization agreement with creditors.
- Cross-border claims or foreign creditors with interests in local assets.
- Disputes over director or manager liability, fraudulent transfers, or allegations of mismanagement.
- Preparing insolvency filings, defending a case in court, or seeking emergency protective measures to stop creditor actions and preserve business continuity.
Key legal and practical aspects you should know about restructuring and insolvency in San Gil include:
- Governing statute - Colombia has a national insolvency law that establishes procedures for reorganization and liquidation. It aims to preserve business value where possible and to protect creditor rights.
- Types of procedures - The law typically distinguishes between reorganization procedures focused on restructuring liabilities and operations, and liquidation procedures focused on asset realization and distribution to creditors.
- Out-of-court alternatives - Before or alongside formal court proceedings, parties often negotiate out-of-court restructuring agreements or use mediation and conciliation to reach settlements with creditors.
- Role of courts - Local civil or commercial courts in San Gil are responsible for admitting insolvency petitions, appointing an insolvency administrator, supervising the process, and approving restructuring plans.
- Insolvency administrator - Courts usually appoint a neutral administrator to assess assets, verify creditor claims, and supervise the debtor's operations during a proceeding.
- Creditor hierarchy - Colombian law sets a priority order for payment - secured creditors, preferential creditors such as employees and tax authorities, and then unsecured creditors. The exact order and treatment can vary by claim type and statute.
- Employee protections - Employment claims often receive priority treatment, and labor obligations can influence whether a business can continue operating during restructuring.
- Tax and social security claims - Claims by tax authorities and social security agencies can be significant and have special procedures; coordination with DIAN and local social security authorities is often required.
- Sanctions and liability - Directors, managers, or controlling shareholders may face liability for wrongful conduct, fraudulent transfers, or preferential payments prior to insolvency.
- Administrative oversight - National regulators such as the Superintendencia de Sociedades and the Superintendencia Financiera play oversight roles depending on the type of entity involved.
Insolvency occurs when a person or company cannot pay its debts as they come due or when liabilities exceed assets. The legal consequences depend on whether the case enters a reorganization proceeding - which seeks to restructure obligations and preserve the business - or liquidation - which winds up operations and sells assets to pay creditors.
A restructuring proceeding typically begins with a petition filed in the appropriate court by the debtor or by a creditor. The court reviews eligibility, may grant protective measures to pause enforcement actions, and can appoint an insolvency administrator to evaluate the situation and manage the process.
Yes. Colombia's insolvency framework generally covers commercial companies and, in many cases, natural persons who are merchants. The availability and specific steps may differ for non-merchants or micro and small enterprises, and out-of-court options may be more practical for smaller debtors.
Act quickly. Gather financial records, communicate transparently with major creditors, and consult a lawyer to evaluate options for protective measures. Courts can grant provisional relief to suspend foreclosures, attachments, and enforcement while a restructuring plan is considered.
Not necessarily. One of the aims of reorganization is to allow the business to continue operating while implementing a plan to pay creditors. The court and the insolvency administrator will assess whether continued operation is feasible and in the best interest of creditors.
Labor claims usually have preferential treatment in insolvency proceedings. Employers must be mindful of payroll obligations and severance liabilities. Courts often require protection of employees rights and may prioritize payment of certain labor claims in the distribution of assets.
Secured creditors hold rights backed by collateral. Their claims are typically satisfied from the proceeds of the collateral before other creditors are paid. The exact treatment depends on the nature of the security, valuation of collateral, and any agreed restructuring terms.
Yes, creditors with legitimate claims may petition the court to initiate liquidation if they demonstrate insolvency and the court finds reorganization impractical. However, courts also consider the possibility of preserving the business if a viable reorganization plan exists.
Timelines vary widely based on complexity, number of creditors, asset types, and disputes. Some out-of-court restructurings can be resolved in weeks to months. Formal court processes often take many months to several years for complex cases.
Costs depend on the complexity of the case, the lawyer's experience, and fee arrangements - hourly rates, fixed fees, or success fees. Choose a lawyer with experience in Colombian insolvency law, knowledge of the local court practice in Santander, and references from similar cases. Ask prospective lawyers about fee structures, expected timelines, and the likely outcomes.
When seeking help or information in San Gil, consider the following resources - they can provide guidance, oversight, or administrative support:
- Superintendencia de Sociedades - national regulator that supervises corporate restructuring and insolvency matters for companies.
- Superintendencia Financiera de Colombia - oversees financial sector companies and related insolvency or intervention processes.
- DIAN - national tax authority for issues related to tax debts and procedures.
- Local Chamber of Commerce - can provide registration documents, commercial records, and guidance about local business formalities.
- Local civil or commercial courts - these courts hear insolvency petitions and manage proceedings in the San Gil judicial circuit.
- Conciliation and mediation centers - out-of-court dispute resolution through certified conciliators is commonly used to reach restructuring agreements.
- Local bar associations and legal aid clinics - for referrals to experienced insolvency lawyers and, where eligible, pro bono or reduced-fee assistance.
If you are facing restructuring or insolvency issues in San Gil, follow these practical steps:
- Act promptly - delays can allow enforcement actions to proceed and opportunities for restructuring to disappear.
- Gather documentation - collect financial statements, tax returns, bank statements, creditor lists, security agreements, contracts, payroll records, and corporate minutes.
- Seek legal advice - consult an insolvency lawyer experienced with Colombian law and local court practice. An early legal assessment can identify immediate protective measures and realistic options.
- Explore options - consider out-of-court settlements, negotiated payment plans, formal reorganization, or orderly liquidation depending on financial realities and stakeholder positions.
- Communicate with key creditors - transparent discussions can preserve value and increase the chances of a negotiated solution.
- Prepare a realistic plan - if pursuing reorganization, prepare a feasible restructuring plan and cash-flow projections to present to creditors and the court.
- Verify regulatory obligations - coordinate with tax and social security authorities to address priority claims and the possibility of negotiated settlements.
Remember that this guide provides general information and is not a substitute for tailored legal advice. Local legal counsel can analyze your situation, explain specific rights and obligations under Colombian law, and represent you in court or negotiations.
Lawzana helps you find the best lawyers and law firms in San Gil 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 San Gil, Colombia — 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.
