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The amount of the debt after deducting the security is of importance
THE security a creditor has over the property of a debtor as well as its safeguarding should be taken into consideration when deciding whether an application for the debtor going bankrupt will be filed. When the security covers the debt, the creditor is secured and therefore, he is not legalized to file an application for the bankruptcy of the debtor. The steps for the creditor to take in this case are to collect the debt through the liquidation of the security, such as to dispose the immovable property and sell the movables. In the event the security does not cover the debt and the creditor files a bankruptcy application against the debtor, he must state in the application that he will resign from the security given to the debtor’s benefit if the debtor becomes bankrupt or to present an evaluation of the security. In the latter case, he might be accepted as a creditor for the balance of the debt owned to him when the amount of the security is deducted in the same manner as if he was not a secured creditor.

The aforesaid matter is of the interest of debtors and creditors such as banks and credit institutions. As long as there is a security over the debtor’s property, the creditor is obliged to state in the application the kind of the security, if it is a mortgage, a memo or other encumbrance and enclose thereby a relevant evaluation for the value of the property. In this case, the legal right of the creditor is not affected by the possible questioning of the value of the property by the debtor. The fact that the value of the property may be proven bigger than the creditor’s claim does not prevent the Court from issuing an order of receipt against the debtor, with the condition that the evaluation is correct and real. The Court is not obliged to examine and decide which the market value of the creditor’s security is.

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