Over-indebtedness and recovery alternatives of over-indebtedness

Direct bankruptcy of stock corporations and cooperatives was issued in Debt Enforcement and Bankruptcy Law 179 which was rearranged with the Law No. 4949. The reason of this bankruptcy is over-indebtedness. In other words, if the debts of a stock corporation are in a condition that exceeds their assets, it means that this stock corporation or cooperative is indebted. Indebted corporation's or cooperative's obligation of bankruptcy is obliged. Besides, there are some institutions that prevent bankruptcy of a stock corporation or a cooperative which is in the stage of over-indebtedness, and bring this corporation or cooperative back to the business life through rehabilitating (Postponement of Bankruptcy, Letter of Subordination, Agreement of Bankruptcy, Conciliation, etc.). In brief, these institutions are institutions that prevent bankruptcy in the case of existence of conditions. This paper firstly emphasizes on over-indebtedness. Then, the study will be completed with views of practice and doctrine through institutions which prevent over-indebtedness. Keywords: Over-indebtedness, Bankruptcy, Postponement of Bankruptcy, Letter of Subordination, Merger, Capital Decrease, Agreement of Bankruptcy, Conciliation.