When your debtor applies for a composition with creditors, your position changes at once: your enforcement proceedings stop, interest ceases to run, and the fate of your claim no longer depends on proceedings you control but on a process already under way.
This article sets out composition not from the debtor's side but from the creditor's: what rights you have, what periods are running, and why you may be bound by the outcome even if you voted against it. The subject is governed by Enforcement and Bankruptcy Law No. 2004.
The moratorium is published: what happens to your proceedings?
On an application for composition the court first grants a provisional moratorium, and the law provides that the provisional moratorium produces the effects of the definitive one. The effects therefore begin immediately. The definitive moratorium is, as a rule, one year.
For creditors the consequences are:
- No enforcement whatever may be commenced against the debtor — including proceedings under Law No. 6183 on the collection of public claims — and proceedings already begun are stayed.
- Interim injunctions and precautionary attachment orders are not executed.
- Limitation periods and preclusive periods capable of being interrupted by an act of enforcement do not run.
- Unless the confirmed project provides otherwise, interest ceases to run on every claim not secured by pledge from the date of the definitive moratorium.
The law admits one exception: enforcement by attachment remains available for the preferential claims in the first rank of Article 206. For all other claims the route is closed.
If you are a secured creditor
Claims secured by pledge are subject to a different regime, and your position is markedly stronger.
During the moratorium enforcement by realisation of the pledge may be commenced, or proceedings already begun continued. But the law sets two limits: no protective measures may be taken in those proceedings and the pledged asset may not be sold.
A provision added in 2021 allows some flexibility: where the pledged asset is not to be used by the business under the composition project, or where its value will fall or its safekeeping prove costly, a sale may be permitted. From the proceeds the secured creditor is paid up to the value of the pledge.
Further, on the debtor's application the confirmation decision may postpone the safekeeping and sale of the pledged asset for up to one year. That requires the secured claim to have arisen before the composition application, no unpaid interest to be outstanding on it as at the date of application, and approximate proof that the asset is essential to the operation of the business.
Objecting to the moratorium: the seven-day right that is often missed
The provisional moratorium is published in the trade registry gazette and on the official announcement portal, and notified to the land registry, the trade registry, the tax office, the banking associations and the relevant chambers.
One item that must appear in that announcement is the right creditors most often overlook: creditors may, within a strict period of seven days from publication, object by petition, showing with their evidence that no circumstance justifying a moratorium exists, and ask the court to refuse the composition application.
The period is strict. In deciding on the definitive moratorium the court takes into account the grounds raised by objecting creditors. This is therefore the earliest and most effective point at which you can be heard.
A similar opportunity exists at confirmation: the hearing is announced, and objectors may attend provided they give written notice of their grounds at least three days before the hearing.
The creditors' meeting and the vote
Once the project has been prepared and claims notified and examined, the commissioner convenes the creditors by a further announcement to discuss the project. The meeting must be held at least fifteen days after the announcement, and creditors may inspect the documents during the seven days before it. A copy of the announcement is posted to creditors whose address is known.
For the project to be treated as accepted the law offers two alternative majorities:
| Option | Majority required |
|---|---|
| a) | More than half of the registered creditors and of the claims |
| b) | More than one quarter of the registered creditors and two thirds of the claims |
Only creditors affected by the project may vote. Holders of preferential claims, and the debtor's spouse, child, parents and siblings, are left out of the calculation of the majority. Claims secured by pledge count only to the extent left unsecured after the valuation.
Confirmation: you are bound even if you voted against
A composition becomes binding on confirmation. The project may also provide that it becomes binding when the confirmation decision becomes final; in that case the effects of the moratorium continue until then.
For creditors this is the crucial consequence: a composition that has become binding is compulsory for all claims arising before the composition application. Not attending the meeting, or voting against, does not take you outside it. Claims arising during the moratorium without the commissioner's consent fall within the same scope.
The creditors' committee
Together with the definitive moratorium, or at a suitable time during it, the court may form a creditors' committee. It may not exceed seven creditors, must have an odd number of members, and no fee is awarded to them.
Representation on the committee is valuable for following the process closely and for staying informed about the commissioner's work. Creditors with substantial claims would do well to consider it.
Frequently asked questions
- The moratorium has been published — can I continue my proceedings? No. No enforcement may be commenced during the moratorium and proceedings already begun are stayed. The only exception is attachment for first-rank preferential claims.
- Can I execute the precautionary attachment order I hold? No. The law provides that interim injunctions and precautionary attachment orders are not executed during the moratorium.
- Does interest keep running on my claim? Unless the confirmed project provides otherwise, interest ceases to run on claims not secured by pledge from the date of the definitive moratorium.
- I am a secured creditor — can I force a sale? You may commence or continue proceedings, but as a rule no sale may take place. A sale may be permitted in the cases set out in the law.
- Can I object to the moratorium? Yes. Within a strict seven days of publication you may object by petition, with your evidence, and ask for the application to be refused.
- What if I do not attend the meeting? A confirmed composition binds creditors who did not attend or who voted against it.
- What majority is needed for acceptance? Either more than half of the creditors and of the claims, or more than one quarter of the creditors and two thirds of the claims.
- Is my public-law claim affected? Public claims under Law No. 6183 are excluded from the binding-effect provision.
- Can I join the creditors' committee? The court may form a committee of no more than seven creditors with an odd number of members; no fee is awarded.
How we work on these files
We watch for publication of the moratorium and assess the seven-day objection period before it is lost, preparing the grounds with supporting evidence. We establish whether your claim is preferential, secured or ordinary and what that means for the binding effect. We handle registration of the claim, inspection of the documents before the meeting and the exercise of your vote, and consider representation on the creditors' committee. At the confirmation stage we give notice of the grounds of objection in time and appear at the hearing.