The first stage of the bankruptcy procedure is to assess the economic situation of the company. On the one hand, it may be insolvent, i.e. it may be unable to meet some of its obligations due to lack of financial means and access to credit, i.e. its assets are insufficient to meet its liabilities. On the other hand, the company may be going through a period of financial difficulties that prevent it from complying with its obligations.

Bankruptcy proceedings can be filed by the company itself 60 days after it has failed to comply with at least one relevant obligation that would render it unable to resolve the generality of its duties.

In addition to the company, creditors can also initiate bankruptcy proceedings against a company that is economically unable to solve its financial problems, in the event of its owners fleeing or leaving the business registered office, or in a situation of dissipation or loss of assets. Also, for all the above reasons, the Public Prosecutor's Office may open bankruptcy proceedings against a company.

The court for the situation of the establishment where the company has its registered office or carries out its main activity shall be the one responsible for the bankruptcy proceedings. However, where there is none, the competent court shall be that of the domicile or registered office of the debtor businessman.

In order for the bankruptcy proceeding to proceed, a written petition must be filed. This is followed by the phases of service, opposition, in which all those serviced have ten days to lodge an opposition or justify their claims, the order to proceed with the action, trial, sentence and, finally, opposition by stays of execution.

Once declared bankrupt by judgment, the liquidator may liquidate the assets within a period of six months.