Studying the ways of recovering debts from a Bankrupt Merchant

Abstract

Bankruptcy is a situation in which a merchant has become incapable of paying debts. In Iran, before the enactment of the Commercial Code, the provisions relating to insolvency were applied to both merchants and non-merchants; but following the enactment of that code, merchants are subject to the bankruptcy regulations, and non-merchants are subject to the insolvency regulations. As a whole, the common denominator between all regulations of bankruptcy and insolvency is the failure of payment of debts and liabilities having been upon the bankrupt or the insolvent. Request for the insolvency of the cost of proceedings and judgment debt on behalf of the merchant who claims for insolvency is rejected; but, according to the provisions of the Commercial Code, the merchant ought to petition for bankruptcy. Necessary and sufficient Conditions for the announcement of bankruptcy are mentioned in the Commercial Code, the most required of which is that the person has to be a businessman who is incapable of paying debts. Note that, most of the merchants are ignorant of Commercial Code provisions, bankruptcy regulations, and the ways of recovering debts from a bankrupt merchant. In this article, we have tried to introduce the ways of recovering debts of a bankrupt merchant.