Daegu corporate legal lawyer: “Corporate bankruptcies are increasing in the aftermath of COVID-19, so we must be cautious about bankruptcy and rehabilitation.”

Amid the recent economic recession in the aftermath of COVID-19, the number of personal and corporate bankruptcies filed in court last month increased by double digits compared to the previous month.

An official from the legal profession said, “As regular personnel changes occur in the courts every February, it is common for the number of applications for bankruptcy and rehabilitation to decrease.” He added, “The National Court Administration recommended a recess to courts nationwide on February 24 due to COVID-19, and despite court personnel changes and the recess period due to COVID-19 in February, applications for bankruptcy and rehabilitation showed an increase.”

Economic experts predict that if COVID-19 continues for a long time, the number of small and medium-sized businesses going bankrupt (bankruptcy or rehabilitation) due to the worsening economy will increase further.

A corporate legal lawyer at Daeryun Law Firm, who is in charge of legal advice on corporate rehabilitation and bankruptcy, said, "Korea has a bankruptcy system (rehabilitation and bankruptcy) to help corporations and economically active people who are at risk of bankruptcy due to excessive debt. If you are experiencing difficulties due to an economic downturn, utilizing social safety nets such as the rehabilitation and bankruptcy system may be a solution."

He continued, “If you look at the statistical data, in the past there were many cases where corporate rehabilitation procedures could not be completed and led to bankruptcy, but these days, there are many companies that skip the rehabilitation procedures and choose bankruptcy procedures. The unfortunate thing about the current situation is that even though they can recover through rehabilitation, there are cases where bankruptcy procedures are preceded by various factors.”

He added, “Management has become difficult, but if maintaining the business is more valuable than liquidating it, choosing a rehabilitation system would be a more appropriate alternative.” He added, “If you are not sure about corporate bankruptcy and corporate rehabilitation, you can seek assistance from a legal expert with field experience and know-how. To this end, you should select a legal advisor after weighing the possibility of providing essential advice to the company by examining whether they have information on corporate-related legal issues and whether they have a system to deal with disputes. “He advised.

Meanwhile, Daeryun Law Firm, which provides ‘customized, one-stop legal services’, has branches throughout Seoul, Busan, Daegu, Incheon, Gwangju, Daejeon, Ulsan, Suwon, Changwon, Cheongju, Jeonju, Uijeongbu, Chuncheon, Jinju, and Jeju.

real@heraldcorp.com

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