-Kinds of procedure of insolvency

-Remedy of cooperative when declared insolvent

-Effects of insolvency on cooperatives
-Rights of creditors when cooperative becomes insolvent
1. Voluntary insolvency- an insolvent debtor owing debts exceeding in amount in
the sum of P 1,000 may apply to be discharged from his debts and liabilities by
petition to the RTC of the province or city in which he has resided for 6 months
next preceding the filling of the petition.

2. Involuntary insolvency- an adjudication of insolvency may be made by the

petition of 3 or more creditors, residents of the Philippines, whose credits or
demands accrued in the Philippines, for the amount of which credits or demands
are in the aggregate of not less the P 1,000
1. Filing of the petition by the debtor praying for the declaration of insolvency
2. Issuance of order of adjudication declaring the petitioner insolvent
3. Publication and service of the order
4. Meeting of the creditors to elect the assignee in insolvency
5. Conveyance of the debtors property by the clerk of court to the assignee.
6. Liquidation of the debtors assets and payment of his debts
7. Composition, if agreed upon 8. Discharge of the debtor on his application, except a
corporation 9. Objection, if any, to the discharge
10. Appeal to the SC in certain cases
1. By an insolvent debtor
2. Owing debts exceeding in amount of the sum of P1000
3. In the RTC of the province or city in which he has resided for 6 months next preceding the
filing of such petition
4. Setting forth in his petition the following
a. His place of residence
b. The period of residence therein immediately prior to filing said petition
c. His inability to pay all his debts in full
d. His willingness to surrender all his property, estate, and effects not exempt
from execution for the benefit of creditors
e. An application to be adjudged an insolvent
 Once the petition is filed, it ipso facto takes away and deprives the debtor petitioner of
 the right to do or commit any act of preference as to creditors, pending the final
adjudication
1. A verified schedule must contain—
a. A full and true statement of all debts and liabilities of the insolvent debtor
b. An outline of the facts giving rise or which might
give rise to a cause of action against such insolvent debtor

2. A verified inventory which must contain—

a. An accurate description of all the personal and real
property of the insolvent exempt or not from
execution including a statement as of its value, location and encumbrances thereon
b. An outline of the facts giving rise or which might
give rise to a right of action in

 favor of the insolvent debtor

 On filing a petition for a discharge from his debts, an
insolvent is required to present a verified schedule of liabilities and a verified
inventory of his properties

 The presentation of such documents stating the amount of

each creditorʼs claim is a jurisdictional requirement,
without the proper performance of which his subsequent discharge will be of no avail
 That the property is erroneously or ambiguously described
in the insolvents inventory will not affect the title of purchasers in the
insolvency proceedings. All the property of the insolvent passes to his assignee
and is administered in the insolvency proceedings regardless of errors in the
insolvency.

 If the insolvent omits property from his inventory, through

either mistake or fraud, it is the duty of the assignee to
have the inventory amended so as to include it and take possession and
administer it
Even property exempt from execution must be included in order to
preclude possible fraudulent omissions under the
pretext that such property is exempt. But where the
petitioner didn't attach an inventory to its petition for
insolvency, alleging under oath that it had no property to
inventory, the lack of inventory was held not fatal to the
petition because it was assumed, until proven

otherwise, that the petitioner was stating the truth.

1. All the assets of the debtor not exempt from execution are taken possession of
by the sheriff until the appointment of a receiver or assignee
2. The payment to the debtor of any debts due to him and the delivery to
the debtor or to any person for him of any
property belonging to him, and the transfer of any property to him are
forbidden
3. All civil proceedings pending against the insolvent debtor shall be stayed
4. Mortgages or pledges, attachments or executions on property of the
debtor duly recorded and not dissolved are not, however, affected by the order
 The debtor will get a discharge

A corporation doesn't get a discharge

The partners in a partnership will get a discharge