Chile : Insolvency and Creditor Rights Systems
The legal and institutional framework governing creditor rights and insolvency proceedings in Chile reasonably complies with expectations of a modern, credit-based economy, although some shortcomings affect the full effectiveness of credit risk man...
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| Format: | Insolvency Assessment (ROSC) |
| Language: | English en_US |
| Published: |
Washington DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2004/06/6559950/chile-report-observance-standards-codes-insolvency-creditor-rights-systems-chile-report-observance-standards-codes-rosc-insolvency-creditor-rights-systems http://hdl.handle.net/10986/14421 |
| id |
okr-10986-14421 |
|---|---|
| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING AFFILIATED COMPANIES ASSETS AUCTION BAD FAITH BANKRUPTCY BANKRUPTCY COURTS BANKRUPTCY LAW BANKS BORROWING CAPITAL FLOWS CAPITAL MARKETS CLAUSES COMMERCIAL PAPER CONSUMER CONSUMER PROTECTION CONTRACTUAL OBLIGATIONS CONVEYANCE COURT CREDIT CREDIT BUREAUS CREDIT PRACTICES CREDIT RISK CREDIT RISK MANAGEMENT CREDITOR CREDITORS DATE OF EXECUTION DEBT DEBT AGREEMENTS DEBT SECURITIES DEBTORS DEED ENFORCEMENT MECHANISM FINANCIAL CONTRACT FINANCIAL CONTRACTS FINANCIAL INSTITUTIONS FINANCIAL TRANSACTIONS FOREIGN INVESTORS GUARANTY INDEMNIFICATION INSOLVENCY INSOLVENCY LAW INSOLVENCY PROCEEDING INSTALLMENT INSURANCE INTELLECTUAL PROPERTY INTEREST RATE INTEREST RATES INVENTORY INVESTMENT LAWS LEGAL FRAMEWORK LEGAL PROVISION LEGAL PROVISIONS LEGISLATION LIABILITY LIENS LIQUIDATION LONG TERM DEBT MORTGAGE MORTGAGES NEGOTIABLE INSTRUMENTS NEGOTIATION PROMISSORY NOTES RECEIVERSHIP REGULATORY FRAMEWORK REORGANIZATION REPAYMENT REPOSSESSION RISK TAKING SALE OF GOODS SECURED CREDITOR SECURED CREDITORS STATE OWNED ENTERPRISES STATEMENTS SWAPS SYNDICATED LOANS THIRD PARTIES THIRD PARTY TIME LIMITS TRANSPARENCY TRUSTS |
| spellingShingle |
ACCOUNTING AFFILIATED COMPANIES ASSETS AUCTION BAD FAITH BANKRUPTCY BANKRUPTCY COURTS BANKRUPTCY LAW BANKS BORROWING CAPITAL FLOWS CAPITAL MARKETS CLAUSES COMMERCIAL PAPER CONSUMER CONSUMER PROTECTION CONTRACTUAL OBLIGATIONS CONVEYANCE COURT CREDIT CREDIT BUREAUS CREDIT PRACTICES CREDIT RISK CREDIT RISK MANAGEMENT CREDITOR CREDITORS DATE OF EXECUTION DEBT DEBT AGREEMENTS DEBT SECURITIES DEBTORS DEED ENFORCEMENT MECHANISM FINANCIAL CONTRACT FINANCIAL CONTRACTS FINANCIAL INSTITUTIONS FINANCIAL TRANSACTIONS FOREIGN INVESTORS GUARANTY INDEMNIFICATION INSOLVENCY INSOLVENCY LAW INSOLVENCY PROCEEDING INSTALLMENT INSURANCE INTELLECTUAL PROPERTY INTEREST RATE INTEREST RATES INVENTORY INVESTMENT LAWS LEGAL FRAMEWORK LEGAL PROVISION LEGAL PROVISIONS LEGISLATION LIABILITY LIENS LIQUIDATION LONG TERM DEBT MORTGAGE MORTGAGES NEGOTIABLE INSTRUMENTS NEGOTIATION PROMISSORY NOTES RECEIVERSHIP REGULATORY FRAMEWORK REORGANIZATION REPAYMENT REPOSSESSION RISK TAKING SALE OF GOODS SECURED CREDITOR SECURED CREDITORS STATE OWNED ENTERPRISES STATEMENTS SWAPS SYNDICATED LOANS THIRD PARTIES THIRD PARTY TIME LIMITS TRANSPARENCY TRUSTS World Bank Chile : Insolvency and Creditor Rights Systems |
| geographic_facet |
Latin America & Caribbean Chile |
| description |
The legal and institutional framework
governing creditor rights and insolvency proceedings in
Chile reasonably complies with expectations of a modern,
credit-based economy, although some shortcomings affect the
full effectiveness of credit risk management and resolution:
Financial institutions over-rely on real estate as
collateral. Pledges are not enough developed because
legislation on secured interests over movable assets is
fragmented and the publicity and registration mechanism for
pledges are not sufficiently reliable. Individual
enforcement proceedings are lengthy and complicated, both
for secured and unsecured creditors. Enforcement proceedings
using executory instruments take 1 to 3 years, whereas
creditors not enjoying such instruments use ordinary
proceedings whose duration is even longer (3 to 5 years).
Insolvency legislation is integrated into the country's
broader legal and commercial system, providing a liquidation
proceeding whose average duration, however, is 2 to 3 years.
The Insolvency Law also governs judicial reorganization
proceedings but classification of creditors for voting is
not allowed, which may be a relatively significant rigidity
in an environment where most financial credit is secured.
Treatment of contractual obligations in insolvency is not
sufficiently developed in the Insolvency Law, which also
lacks clear provisions on how to deal with subordination
debt agreements and financial contracts in bankruptcy.
Provisions to deal with insolvency cases of a cross-border
nature are fairly antiquated and not responsive to solve
main problems typically present in those cases. Corporate
workouts would be significantly increased if out-of-court
plans approved by a majority of creditors were able to be
converted into prepackaged restructuring plans that bind
dissenting minorities. The judicial framework for commercial
enforcement and insolvency proceedings is generally
perceived as being independent and reliable, although most
courts deal with an excessive number of processes.
Notwithstanding, there are no commercial courts nor courts
specializing in insolvency in Chile. Insolvency
administrators are independent professionals supervised by
the Bankruptcy Commission, a body meeting the requirements
of an independent regulatory institution. The Bill on Second
Capital Market Reform, submitted to Congress, is a relevant
step in the right direction to make Chilean creditor rights
and the insolvency system more effective. |
| format |
Economic & Sector Work :: Insolvency Assessment (ROSC) |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
Chile : Insolvency and Creditor Rights Systems |
| title_short |
Chile : Insolvency and Creditor Rights Systems |
| title_full |
Chile : Insolvency and Creditor Rights Systems |
| title_fullStr |
Chile : Insolvency and Creditor Rights Systems |
| title_full_unstemmed |
Chile : Insolvency and Creditor Rights Systems |
| title_sort |
chile : insolvency and creditor rights systems |
| publisher |
Washington DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2004/06/6559950/chile-report-observance-standards-codes-insolvency-creditor-rights-systems-chile-report-observance-standards-codes-rosc-insolvency-creditor-rights-systems http://hdl.handle.net/10986/14421 |
| _version_ |
1764429136976150528 |
| spelling |
okr-10986-144212021-04-23T14:03:18Z Chile : Insolvency and Creditor Rights Systems World Bank ACCOUNTING AFFILIATED COMPANIES ASSETS AUCTION BAD FAITH BANKRUPTCY BANKRUPTCY COURTS BANKRUPTCY LAW BANKS BORROWING CAPITAL FLOWS CAPITAL MARKETS CLAUSES COMMERCIAL PAPER CONSUMER CONSUMER PROTECTION CONTRACTUAL OBLIGATIONS CONVEYANCE COURT CREDIT CREDIT BUREAUS CREDIT PRACTICES CREDIT RISK CREDIT RISK MANAGEMENT CREDITOR CREDITORS DATE OF EXECUTION DEBT DEBT AGREEMENTS DEBT SECURITIES DEBTORS DEED ENFORCEMENT MECHANISM FINANCIAL CONTRACT FINANCIAL CONTRACTS FINANCIAL INSTITUTIONS FINANCIAL TRANSACTIONS FOREIGN INVESTORS GUARANTY INDEMNIFICATION INSOLVENCY INSOLVENCY LAW INSOLVENCY PROCEEDING INSTALLMENT INSURANCE INTELLECTUAL PROPERTY INTEREST RATE INTEREST RATES INVENTORY INVESTMENT LAWS LEGAL FRAMEWORK LEGAL PROVISION LEGAL PROVISIONS LEGISLATION LIABILITY LIENS LIQUIDATION LONG TERM DEBT MORTGAGE MORTGAGES NEGOTIABLE INSTRUMENTS NEGOTIATION PROMISSORY NOTES RECEIVERSHIP REGULATORY FRAMEWORK REORGANIZATION REPAYMENT REPOSSESSION RISK TAKING SALE OF GOODS SECURED CREDITOR SECURED CREDITORS STATE OWNED ENTERPRISES STATEMENTS SWAPS SYNDICATED LOANS THIRD PARTIES THIRD PARTY TIME LIMITS TRANSPARENCY TRUSTS The legal and institutional framework governing creditor rights and insolvency proceedings in Chile reasonably complies with expectations of a modern, credit-based economy, although some shortcomings affect the full effectiveness of credit risk management and resolution: Financial institutions over-rely on real estate as collateral. Pledges are not enough developed because legislation on secured interests over movable assets is fragmented and the publicity and registration mechanism for pledges are not sufficiently reliable. Individual enforcement proceedings are lengthy and complicated, both for secured and unsecured creditors. Enforcement proceedings using executory instruments take 1 to 3 years, whereas creditors not enjoying such instruments use ordinary proceedings whose duration is even longer (3 to 5 years). Insolvency legislation is integrated into the country's broader legal and commercial system, providing a liquidation proceeding whose average duration, however, is 2 to 3 years. The Insolvency Law also governs judicial reorganization proceedings but classification of creditors for voting is not allowed, which may be a relatively significant rigidity in an environment where most financial credit is secured. Treatment of contractual obligations in insolvency is not sufficiently developed in the Insolvency Law, which also lacks clear provisions on how to deal with subordination debt agreements and financial contracts in bankruptcy. Provisions to deal with insolvency cases of a cross-border nature are fairly antiquated and not responsive to solve main problems typically present in those cases. Corporate workouts would be significantly increased if out-of-court plans approved by a majority of creditors were able to be converted into prepackaged restructuring plans that bind dissenting minorities. The judicial framework for commercial enforcement and insolvency proceedings is generally perceived as being independent and reliable, although most courts deal with an excessive number of processes. Notwithstanding, there are no commercial courts nor courts specializing in insolvency in Chile. Insolvency administrators are independent professionals supervised by the Bankruptcy Commission, a body meeting the requirements of an independent regulatory institution. The Bill on Second Capital Market Reform, submitted to Congress, is a relevant step in the right direction to make Chilean creditor rights and the insolvency system more effective. 2013-07-09T18:07:01Z 2013-07-09T18:07:01Z 2004-06 http://documents.worldbank.org/curated/en/2004/06/6559950/chile-report-observance-standards-codes-insolvency-creditor-rights-systems-chile-report-observance-standards-codes-rosc-insolvency-creditor-rights-systems http://hdl.handle.net/10986/14421 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington DC Economic & Sector Work :: Insolvency Assessment (ROSC) Economic & Sector Work Latin America & Caribbean Chile |