RESTRICTIONS AND SANCTIONS IN COMMERCIAL BANKRUPTCY CASES IN BOLIVIA

RESTRICTION OF MOVEMENT (ARRAIGO) FOR BANKRUPT MERCHANTS IN BOLIVIA

Upon the declaration of bankruptcy, the merchant is automatically subject to a travel restriction (arraigo). This measure prohibits them from leaving the jurisdiction of the proceedings without prior judicial approval, thereby protecting creditor interests and ensuring the debtor’s availability for procedural obligations. The goal is to prevent actions that could damage the liquidation process or obstruct justice.

The arraigo may be substituted with alternative measures if the judge determines there are sufficient guarantees to ensure the debtor’s compliance. In practice, this may include financial guarantees or less restrictive travel limitations, depending on the assessed procedural risk.

CRIMINAL CONSEQUENCES OF FRAUDULENT OR NEGLIGENT BANKRUPTCY IN BOLIVIA

If the bankruptcy is found to be fraudulent or negligent, the merchant may face not only civil but also criminal penalties. Once such a qualification is made, the criminal court is notified and may initiate prosecution, which can result in the detention of the merchant and any accomplices.

For example, a business owner in Santa Cruz who deliberately conceals assets to exclude them from the liquidation estate could be accused of fraudulent bankruptcy. This may lead to sanctions such as permanent disqualification from commercial activity and the imposition of penalties under the Penal Code.

In addition to imprisonment, individuals found guilty of fraudulent or negligent bankruptcy may be permanently barred from conducting commercial operations. This reinforces Bolivia’s commitment to transparency and public credit protection in the marketplace.

LEGAL PROCEDURE FOR FRAUDULENT OR NEGLIGENT BANKRUPTCY IN BOLIVIA

Once a court determines that a bankruptcy is fraudulent or negligent, it must forward the corresponding resolution to the criminal judge, along with certified copies of the relevant case documents. This referral initiates a parallel criminal process to determine the liability of the bankrupt individual and any involved parties.

The cooperation between civil and criminal jurisdictions ensures that illegal conduct affecting the integrity of the commercial system is properly sanctioned, upholding legal security in commercial relations.

In summary, bankruptcy proceedings in Bolivia involve not only asset liquidation but also protective and punitive measures that safeguard transparency and commercial trust. Travel restrictions, possible detention, and criminal consequences for fraudulent or negligent conduct form a comprehensive legal framework aimed at protecting creditors and maintaining economic order.