Concordat is a legal and financial process in which a debtor applies to the court to restructure debts and rearrange payment conditions in cases where he has difficulty paying as a result of his financial situation deteriorating. It is a mechanism that allows businesses or individuals to reach an agreement to pay their debts without going bankrupt. When we examine the concordat institution in detail, we attach importance to the following issues:
- Why Apply for Concordat? The application for concordat is made by the debtor when he is at risk of financial crisis or bankruptcy. When the debtor is unable to pay his debts or has difficulty paying, he aims to restructure his debts and rearrange the payment conditions by requesting concordat.
- Concordat Types:
- Deferred Concordat: The debtor applies to postpone his debts for a certain period of time and restructure them within this period.
- Sales Supported Concordat: The debtor aims to pay off his debts with the income he will obtain by selling his assets.
- Concordat accompanied by the Committee of Creditors: The debtor and creditors cooperate in restructuring debts and determining payment terms by forming a committee before the court.
- Concordat Application Process:
- Application: The debtor applies to the court for concordat. The application is supported by a detailed report containing the debtor's financial situation and concordat plan.
- Temporary Respite Decision: The court may review the application and grant the debtor a temporary payment deferral period. During this period, creditors cannot collect.
- Appointment of Commissioner: The court appoints a commissioner to supervise the concordat process. This person reviews the debtor's financial situation and communicates with creditors.
- Creditors Meeting: Creditors hold a meeting at the court to review and discuss the concordat plan. A vote is taken to accept or reject the plan.
- Court order: The concordat plan can be approved by the court with the unanimous consent of the creditors or with the approval of a certain majority of them. The debtor's payment conditions are rearranged in accordance with the approved plan.
- Conclusion: Concordat is a mechanism that allows the debtor to restructure his debts without going into bankruptcy. In this process, creditors aim to find the best solution by cooperating with the debtor. However, the concordat process can be complex and may require professional legal and financial advice.
- Note: The concordat process may differ from country to country. Each country's concordat regulations and legal procedures may be different. Therefore, it is important to carefully examine the legal legislation and procedures of the relevant country before applying for concordat.
