To link to this article, copy this persistent link:
(Sep 01, 2010) Colombia's Law 1380 of January 25, 2010, establishes the insolvency regimen for natural persons (with the exception of merchants). This new insolvency regime allows debtors who are Colombian residents to negotiate any type of debt with their creditors in a non-judicial, conciliation procedure. Alimony obligations are the only exception to this benefit. The Law aims to promote good faith in financial and commercial operations conducted by natural persons. (Law 1380, DIARIO OFICIAL (Jan. 25, 2010), http://www.secretariasenado.gov.co/senado/basedoc/ley/2010/ley_
The Law creates Conciliation Centers, under the management of the Ministry of the Interior and Justice, for the implementation of conciliation procedures. The government establishes fee schedules for conciliators, attorneys registered with Conciliation Centers, and notaries. (Id.)
The Law regulates the stages of the conciliation procedure in detail and contains specific provisions for the determination of the rate of occurrence of debtor default. It also specifies the rights and obligations of the parties, the powers of conciliators, and other administrative activities performed in the course of conciliation procedures. The conciliation procedure commences with an affidavit submitted by the debtor requesting to negotiate his debts with his creditors. Among the main aspects, the affidavit must include a list of the debtor's debts, the causes of his insolvency, identification of the creditors and of the debtor's assets, the history of the administrative or judicial procedures pending against the debtor, certification of his income, and a proposal for the negotiation of his debts. If the conciliator agrees to review the request for the negotiation of the debts, that decision stops the statute of limitations and suspends the collection of interest, administration charges, and other payments connected to the debts underlying the insolvency procedures. (Id.)
The conciliator, the parties, and their lawyers may resort to extensive use of the Internet for purposes of notifications, summonses, provision of evidentiary means, and other pleadings and activities during conciliation procedures. The Law contains special provisions for debtors who are agricultural producers and fishermen, including the use by them of resources available from the National Agricultural Reactivation Program. This program allocates financial resources for the benefit of agricultural producers and fishermen who are delinquent in the payment of their debts, with the purpose of allowing them to continue their activities during and after the renegotiation of their debts.
Interestingly, the Law allows the debtor to propose a barter of his personal assets as a form of payment of outstanding debts to his creditors or as a substitute for or reduction in guarantees previously offered. (Id.)
Matters that are outside the jurisdiction of the conciliators arising during insolvency procedures must be referred to the municipal civil judge of the locality concerned. Municipal civil judges decide those matters in summary oral proceedings. (Id.)
If conciliation procedures are successful, the conciliator approves a "Credit Balance Qualification and Graduation Draft," in accordance with the Civil Code's provisions that call for the establishment of a list of debts that enjoy priority in payment in the case of bankruptcy procedures. If approved by the debtor and by creditors representing at least 50% of the total debts, the drafts become "Payment Agreements," which are fully enforceable before the courts. Finally, the Law outlines certain crimes associated with conciliation procedures based on false statements, fraud, deceitful concealment of information, and other related actions. (Id.)
|Author:||Dante Figueroa More by this author|
|Topic:||Bankruptcy More on this topic|
|Jurisdiction:||Colombia More about this jurisdiction|
Search Legal News
Find legal news by topic, country, keyword, date, or author.
Global Legal Monitor RSS
Get the Global Legal Monitor delivered to your inbox. Sign up for RSS service.
The Global Legal Monitor is an online publication from the Law Library of Congress covering legal news and developments worldwide. It is updated frequently and draws on information from the Global Legal Information Network, official national legal publications, and reliable press sources. You can find previous news by searching the GLM.
Last updated: 09/01/2010