Guide to Doing Business
Bankruptcy & moratorium
The roles of the creditor and the debtor are clearly defined in the BES islands Bankruptcy Decree 1931 (”Bankruptcy Decree”). Any creditor is free to collect outstanding receivables without taking the claims of other creditors into account and the debtor enjoys the right to choose which debt to fulfill first, unless a creditor has been granted legal precedence.
However, if the debtor is not able to satisfy outstanding debts anymore and becomes insolvent, creditors may seize and execute claims on the properties of the debtor, leaving insufficient assets for remaining creditors to properly carry out their claims. This is where the rules of the Bankruptcy Decree come at stake. All legal entities, commercial partnerships and individuals can be declared bankrupt and can be granted a moratorium.