The bankruptcy of the company does not mean that the debt disappears. The purpose of bankruptcy procedure is to deal with the company's debt problem fairly and orderly, rather than simply forgive the debt.
First, the basic concept of corporate bankruptcy
Bankruptcy of a company means that an enterprise cannot pay off its debts due on time due to poor management or other reasons and enters bankruptcy proceedings according to law. In bankruptcy proceedings, the assets of the company will be liquidated and the debts will be paid off according to legal orders. Bankruptcy does not mean that debts will disappear automatically, but that debts should be dealt with by legal means.
Second, the company's debt treatment after bankruptcy
After the company enters bankruptcy proceedings, the bankruptcy administrator will be appointed by the court to be responsible for the management and liquidation of the company's assets. The bankruptcy administrator will evaluate and dispose of the company's assets in accordance with legal procedures and pay off debts according to law. The repayment order generally includes bankruptcy expenses, employees' creditor's rights, tax creditor's rights and ordinary creditor's rights. If the company's assets are insufficient to pay off all debts, creditors will distribute them according to their respective claims.
Third, the purpose and significance of bankruptcy liquidation
The main purpose of bankruptcy liquidation is to distribute the assets of the company fairly and justly through legal means and protect the interests of creditors to the maximum extent. At the same time, bankruptcy liquidation also helps to maintain market order and prevent chain reaction and social instability caused by enterprise bankruptcy. Through bankruptcy liquidation, enterprises with poor management and insolvency can be cleared out, freeing up more resources and space for the market and promoting healthy economic development.
Fourth, the strategy to avoid bankruptcy of the company.
In order to avoid bankruptcy, enterprises should strengthen financial management, optimize business strategies and improve market competitiveness. At the same time, enterprises should also pay attention to maintain good communication and cooperation with creditors, fulfill their debt obligations in time, and prevent the occurrence of debt crisis. In addition, the government and all walks of life should also strengthen their support and help to enterprises and provide them with a good development environment and policy support.
To sum up:
The bankruptcy of the company does not mean that the debt disappears, but the debt is handled by legal means. The purpose of bankruptcy liquidation is to distribute the assets of the company fairly and justly, protect the interests of creditors and maintain the market order. In order to avoid bankruptcy, enterprises should strengthen financial management and optimize business strategies, and pay attention to communication and cooperation with creditors. The government and all walks of life should also provide a good development environment and policy support for enterprises.
Legal basis:
Enterprise Bankruptcy Law of the People's Republic of China
Article 2 provides that:
If an enterprise as a legal person is unable to pay off its due debts, its assets are insufficient to pay off all its debts or it obviously lacks solvency, it shall clear up its debts in accordance with the provisions of this Law.
Enterprise Bankruptcy Law of the People's Republic of China
Article 107 stipulates:
After the debtor is declared bankrupt, the debtor is called bankruptcy, the debtor's property is called bankruptcy property, and the creditor's rights enjoyed by the people's court when accepting the bankruptcy application are called bankruptcy claims.
Enterprise Bankruptcy Law of the People's Republic of China
Article 1 13 stipulates:
After paying off the bankruptcy expenses and debts first, the bankruptcy property shall be paid off in the following order:
(1) Wages, medical care, disability allowance and pension expenses owed by the bankrupt to employees, basic old-age insurance and basic medical insurance expenses owed to employees' personal accounts, and compensation that should be paid to employees according to laws and administrative regulations;
(2) Social insurance premiums and taxes owed by the bankrupt other than those specified in the preceding paragraph;
(3) Ordinary bankruptcy claims.
If the bankruptcy property is insufficient to pay off the repayment requirements in the same order, it shall be distributed in proportion.