The Concordat Process

DESCRİPTİONS:

The concordat is regulated under Articles 285-309 of the Execution and Bankruptcy Law. Concordat aims to protect both the debtors in poor financial standing, as well as their creditors. If a debtor and a creditor agree on a concordat, the debtor clears his/her debts by paying the debt in line with the agreement stipulated under the concordat. Therefore, a concordat may be defined as a reconstruction agreement between the debtor and the creditors.

The Concordat is an agreement that even if some creditors do not take a part or agree to the concordat, it will be binding upon them. Therefore, to have a concordat, two different quora of creditors and the amount of debt must be agreed upon. Within this scope, the validity of a concordat is subject to approval of one-half of the creditors whose receivables exceed two-thirds of the total debt of the debtor.