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| Published Friday, April 16, 2021
By the A.M. Costa Rica staff
On Thursday, President Carlos Alvarado signed the new law entitled "Ley Concursal de Costa Rica," which could be interpreted as Bankruptcy Code law in the English language. It establishes new tools to streamline the processes for insolvency declaration of companies.
The Bankruptcy Code, for example in the United States, includes bankruptcy crimes (Title 18 of the United States Code) or bankruptcy tax implications (Title 26 of the United States Code) among other procedures.
This new law in Costa Rica, according to the government, makes debt processes easier and faster for businessmen, with clear rules reduced costs and modern tools that will allow companies to rescue, improve the valuation of their assets, as well as processes of faster settlements, among other improvements.
"The Ley Concursal constitutes a powerful tool to help the private sector, while helping in the modernization of the Justice Court in dealing with such an important issue," President Alvarado said.
The law was co-created by specialists from the Supreme Court of Justice, the Ministry of the Economy, the Costa Rican Bar Association, among other institutions.
• Some of the new aspects of the law include:
• Establishing a single process for all types of private debtors.
• The incorporation of alternative conflict resolution, so that the interested parties can reach agreements for the resolution of conflicts (between debtors and creditors).
• Authorizing the Supreme Court of Justice to establish the specialized courts necessary to carry out the processes of declaring bankruptcy or other types of conflicts.
The law also enables the Ministry of Economy to authorize and regulate the Alternative Conflict Resolution Centers, in the event of a conflict between the parties that make up the company, but it also encourages the simplification of procedures, the use of technology to reduce time and costs in processes, added the government.
More information about the new Bankruptcy Code scope can be reached at the Costa Rican Court of Justice by calling 506 2295-3000.
What have you heard of an expat facing lengthy processes in declaring a company out of business? We would like to know your thoughts on this story. Send your comments to news@amcostarica.com |
