In a complex economic context, marked by high inflation, high interest rates and growing unemployment (11.3% as of March, with an increase of 1.3 percentage points compared to March 2023), citizens may face situations complex with respect to the payment of their debts.
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For this, Law 1380 of 2010 exists in the country, which establishes the conditions and steps to follow to access this regime. Who has the right to apply? The Law establishes that natural persons, non-merchants, can participate. who have their domicile in the country. This excludes legal entities and merchants.
Likewise, it establishes that the motivations for entering this are that the person has failed to pay two or more obligations in favor of two or more creditors for more than 90 days and if you have one or more enforcement or coercive jurisdiction claims against you
Besides, obligations in default or judicially claimed must represent at least 50% of the liabilities debtor’s total.
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Debt
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How can you access it? The request to begin the debt negotiation process must include several documents and can be submitted directly by the debtor or through an attorney-in-fact. The specific steps and requirements are as follows:
The Law states that the The necessary formats can be downloaded free of charge from the website of the Ministry of the Interior and Justice and the Conciliation Centers. All statements are made under oath, and must include an express statement of the truthfulness and accuracy of the information provided.
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Debt
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Another factor to take into account is that This process is free. lPublic officials authorized to conciliate and conciliation centers of legal offices of law schools and public entities are free of charge. Notaries and private conciliation centers can charge according to established rates.
In order for them to accept the procedure, a verification of requirements will be carried out in which the conciliator verifies that the application meets all the requirements andestablished in law. This includes submitting all necessary documents and complying with default requirements.
Subsequently, a defect fix: If there are defects in the application, the Adjudicator will point out and give the debtor five business days to correct them. If the debtor does not correct the defects within the given period, the request will be definitively rejected.
Likewiseor, before the request is accepted, the debtor must bear the corresponding costs during the process, if any.
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Once the requirements have been verified and defects corrected, the application will be accepted and will notify the start of the debt negotiation process.
One of the possibilities to pay the debts indicated in the aforementioned Law is the inexchange of assets. This means that the debtor can include the delivery of its assets in its negotiation proposal. as partial or total payment of the debts, after which an expert is appointed to value the property. If the value of the asset exceeds the value of the obligations, the debtor may judicially request the auction of the asset and receive the balance or remainder in kind.
Colombian money
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Once the request for debt negotiation processing is accepted, immediate effects are generated that have a significant impact on the obligations and rights of both the debtor and the creditors.
One of the main effects is the suspension of the collection of interest on all obligations included in the insolvency procedure. This means that, during the negotiation process, no additional interest or administration, management or any other type of similar collection that creditors may demand from the debtor will be accrued. This suspension provides the debtor with financial respite, allowing him to concentrate on the negotiation of a payment agreement without the continued increase of your debt.
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Another crucial effect is the suspension of executive civil actions and any property restitution process or coercive jurisdiction against the debtor. Once the application has been accepted, no legal actions can be initiated or continued to collect the debts included in the insolvency procedure.
This suspension extends to all execution demands that were in progress, providing the debtor judicial protection while the payment agreement is negotiated. However, it is important to note that this protection does not extend to co-debtors or guarantors, against whom precautionary measures can be taken.
To ensure the effective application of these effects, the conciliator of the process must notify the judges who are carrying out judicial proceedings against the debtor. The debtor also has the right to claim the nullity of any proceedings that continue after this date.
Finally, Home public service providers cannot suspend the provision of their services to the debtor for having unpaid credits once the debt negotiation process has begun. If the service was already suspended, they must restore it, thus avoiding additional damages for the debtor. The costs of the new services provided from the beginning of the procedure will be paid preferentiallyensuring that the debtor can continue the supply of basic services while their financial situation is negotiated.
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In three cases it is estimated that the process may end: payment agreement, failure of the procedure and non-compliance with obligations. The process is considered successfully concluded if the debtor and his creditors manage to reach a payment agreement during the period of the debt negotiation process.
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However, there is a failure when you cannot correct the defects of your application within the period granted by the Conciliator. It is worth remembering that from the moment the application is submitted, the debtor has an initial period to correct any noted defect.
Lastly, yes After having reached an agreement with the creditors, the person fails to comply with the established conditionss in said agreement, the debt negotiation process will be terminated. The debtor’s failure to comply with the agreement means that he has not been able to meet the agreed payment obligations, which reactivates the rights of creditors to initiate or continue legal action against him.
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