Insolvency proceedings (regular)
Regular insolvency concerns commercial undertakings. If a business is threatened by insolvency, a timely effort to reach out-of-court settlement is appropriate. Creditors will waive some of their claims if a settlement is achieved. If out-of-court settlement fails, debtors or creditors can file for insolvency proceedings. The debtor can do so even prior to becoming finally insolvent to avoid full insolvency. An entrepreneur who fails to file for insolvency proceedings despite continuous inability to pay renders himself liable to prosecution. At first, the proceedings are instituted on a preliminary basis. An insolvency administrator appointed by the court examines the remaining corporate assets. The proceedings finally commence if there are sufficient assets to distribute.