With the Law No. 7101 in 2018, radical changes were made in the Bankruptcy Bankruptcy Bankruptcy Bankruptcy Bankruptcy Bankruptcy Institution, abolishing the "bankruptcy postponement" institution and replacing it with an expanded concordat system. This article explains the transition process and the current situation.
Previous System — Postponement of Bankruptcy
Valid between 2003-2018:
- 1 year + 4 years deferral period for the debtor.
- Restructuring plan.
- Open to abuse (just saving time).
- Less protection of creditor interests.
New System — Concordat
- Temporary deadline 3 months, definitive deadline 1 year + 12 months extension.
- Creditors' approval is mandatory.
- Concordat commissioner inspection.
- Protection by confirmation decision.
- Abuse is limited.
Transitional Provisions
- Bankruptcy postponement files initiated before the entry into force continued under its own regime.
- New applications after entry into force are only concordat.
- Special editing for pending files.
Debtor in Favor of "Old Postponement"
The old bankruptcy postponement was generally more generous to the debtor (5 years); but creditor protection was weak. New concordat:
- The duration has been shortened (max 3+12+12 months = ~27 months).
- Creditors' approval is required.
- The supervision of the commissioners is strict.
Supreme Court 23rd HD — Approach for Transition
23. HD stated that in bankruptcy postponement files started during the transition period, the "effective date" rule is applied, not the "favorable law" principle; It has adopted the continuation of the files that started in the old regime with the old rules.
Practical Conclusion
- Today's new application is only concordat.
- The success of the process depends on the realistic preliminary project and creditor dialogue.
- Financial advisor + lawyer cooperation is essential.
Financial hardship cases take time and expertise; enforcement-bankruptcy law lawyer recommended.