What does the bankruptcy procedure depend on?

Under bankruptcy is understood the inability of the debtor to satisfy all creditors' claims and fulfill their obligations to pay any payments. Insolvency is recognized by the arbitral tribunal, only after ascertaining the court is recognized the state of insolvency.

The very procedure of bankruptcy says that there are several persons who influence the fact of insolvency - it is a debtor and creditors. The debtor can be either an individual, for example, an individual entrepreneur, or a legal entity that is not able to meet the requirements of creditors to pay monetary obligations within the specified period. Creditors may be persons who have the right to demand from the debtor for these monetary obligations. Thus, the bankruptcy procedure is regulated by the federal law "On Insolvency."

To begin with, the bankruptcy procedure must be considered by the arbitration court at the location of the debtor for the legal entity and at the place of residence for the individual. Then the bankruptcy procedure includes several items - surveillance, external management, financial recovery, bankruptcy proceedings and an amicable agreement. The purposes of carrying out of procedures of bankruptcy serve - return of debts of the debtor to creditors and restoration of conditions which are necessary for introduction of the business.

Under supervision understand such procedure which is applied to the debtor with the purpose to provide safety of its property. Thus, an analysis of its financial condition is conducted, a register of requirements is drawn up and the first meeting of creditors is held. So, the bankruptcy procedure , namely, the first part of it - supervision, is a preparatory procedure. It is here, before liquidating the enterprise, that it is necessary to start with the time to collect the necessary documents, notify the interested persons, and prepare an analysis of their financial condition. Observation is mandatory.

In a market economy, and even more so in a world crisis, the likelihood of bankruptcy is a more developmental component of the enterprise. Avoid the possibility of bankruptcy from the moment it is detected. There are many methods that can identify the probability of insolvency, and then carry out its evaluation. There are a number of factors that indicate a difficult financial situation. They must be controlled:

- if the enterprise has unstable profit;

- if the profitability of products or services is low;

- if the liquidity ratios are low;

- if there was a sharp drop in the value of assets or securities;

- if the borrowed funds were used more and exceeded the recommended level of return on assets;

- if the liquidity ratios are low;

- if the return on investment falls;

- if the general factors of commercial risk increase.

Thus, if these factors exist in the enterprise, then this indicates the likelihood of bankruptcy.

After the supervision procedure, the arbitration court can introduce such procedures as financial recovery and external management, which can only be applied to individual farmers.

In general, the factors of bankruptcy can be determined either by external factors or by internal factors. Moreover, internal factors may depend on the work of enterprises, but on the external factors the enterprise can have only a weak influence or, at all, not to influence. External factors are the purchasing power, political stability, the level of culture, the development of technology and science, international competition.

At the end of its activities, the bankruptcy procedure considers an amicable agreement between the bankruptcy creditors and the authorized bodies.