Insolvency Auctions – The process of foreclosures
The process of foreclosure is strictly regulated. In this article we explain how you can participate in bankruptcy auctions.
Insolvency Auctions – Principles of corporate insolvency
Regardless of whether the liabilities of a company exceed his fortune or it can no longer afford meeting his current payments (liquidity), in both cases, for a company this means bankruptcy. If one of these financial circumstances occur, the management of the organisation is required to notify the competent insolvency court.
Corporate insolvencies in Germany
First in a process of insolvency, a company gets the opportunity to evaluate themselves under the supervision of the court or an insolvency administrator appointed by the court with its creditors. Second if, however, no agreement is reached with the creditors, the insolvency proceedings come into phase. Finally, in order to satisfy the creditor claims, by the court order, the liquidation of the insolvent company begins. This means that all remaining assets have to be sold in court-supervised process. For purposes of bankruptcy proceedings the Insolvency Act provides the orderly process for organisations foreclosure.
The items offered at a bankruptcy auction that come out of such insolvency resulting masses and the related regulated foreclosure proceedings.
Fundamentals of foreclosure proceedings
The most important principle, which is established for the process of the legislature, is to provide maximum transparency during the foreclosure process. Transparency, in addition to other regulations, should ensure complete fairness between all involved in the process. Furthermore, to ensure all important criteria of the process, the legislature prescribes that foreclosures would be carried out only by sworn auctioneers. They can be selected by the court or by liquidator, which is appointed by insolvent company.
In preparation for the forced auction all fixed assets of insolvent company that are on so-called bankruptcy estate are sealed on the site. All articles that is are part of this bankruptcy estate are thoroughly recorded and published in a catalog. The information published in the catalog is used mostly by potential buyers to see which items correspond to their needs and classify more precisely their market value. The catalog is then available to prospective buyers and potential bidders sufficient time for grouting that they kits Publications detail deal with the details of the offers.
The bankruptcy auction in foreclosure proceedings
The expiration date of a foreclosure sale is regulated by law as well, which has to be timely announced and it has to include venue and date of a bankruptcy auction. Additionally, the expiration date of the actual auction is strictly regulated. Participants at a foreclosure sale have to be pre-register with the auctioneer before hand. At the beginning of the auction the auctioneer announces individual items and the bidders on the submission of a bid for that item. The auction goes on by bidders increasing the item price till someone submits the highest bid, which means that the rest bidders are outbid.
The auctioneer aims to increase offered price suggesting higher price after every bid. The highest bidder pays the price offered by the auctioneer on the spot and that completes the sale.
While earlier most bidders used to attend on-site live auctions, the internet has expanded the opportunities to participate in foreclosures. On special online platforms designed for insolvency auctions prospective buyers can obtain DETAILED lot information and auction catalogs. In addition, bidders can register online if they wish to participate at foreclosures auctions and in some cases place their bids via the Internet as well. In that way processes such as obtaining the highest bidder, the remaining settlement as payment of auctioned goods, the invoice documentation, etc. can be done online.
Bankruptcy auctions for a favourable Shopping
Several advantages of this method are for companies that participate in foreclosures for bankruptcies, especially if they use the possibility of online bankruptcy auctions. A diverse and clearly presented assortment allows good choice to buy any specific item. Other good advantage, of auction concerning bigger industrial machines is that all items for sale are already configured, completely intact and immediately ready for production. Last but not least, bidders can make the most of particularly favourable prices for goods sold on foreclosures, which makes participation in them particularly attractive.