Mortgage foreclosure and bankruptcy in the Revised Text of the Bankruptcy Law

Concursal

Abstract

The exclusion of singular executions that dismember the debtor's assets is typical of the collective execution that bankruptcy represents. This exclusion is due to the attractive force of the bankruptcy judicial process and the interest in maintaining the continuity of the company, either through the achievement of an agreement with the creditors or through the full transfer of its productive units, which may increase its realization value or allow an assumption of debt by the acquirer. In this context, said interest takes precedence over that of the creditor with real guarantee to carry out his credit. For this reason, its privilege of separate execution is limited when it comes to assets necessary for the continuity of the business or professional activity, by suspending the execution of the guarantee until an agreement with the creditors is reached or one year passes from the declaration of bankruptcy. without having opened the collective execution or reached an agreement. The right of separate execution is lost with the opening of the liquidation if the creditor had not exercised its executive action before the declaration of bankruptcy or had not initiated it after the period of one year to which we have referred before. Although the creditor may recover such right in the event that one year passes from the opening of the liquidation without the affected asset having been disposed of. During the cessation or suspension of the execution of real guarantees on assets necessary for business continuity, the bankruptcy administration may choose to rescue the asset by satisfying the privileged credit as a credit against the estate. Whether in separate individual execution or in collective execution, the creditor has the right to collect on the mortgaged property the entire mortgage liability or amount of the original debt.