STEPS IN VOLUNTARY INSOLVENCY a.

Filing of the petition by the debtor praying for the declaration of

insolvency b. Issuance of order of adjudication declaring the petitioner insolvent c. Publication and
service of the order d. Meeting of the creditors to elect the assignee in insolvency e. Conveyance of the
debtor’s property by the clerk of court to the assignee f. Liquidation of the debtor’s assets and payment
of his debts g. Composition, if agreed upon h. Discharge of the debtor on his application, except a
corporation i. Objection, if any, to the discharge j. Appeal to the SC in certain cases In voluntary
insolvency, a debtor is deemed insolvent upon filing of the petition. The filing of such petition on the
part of the debtor is considered an admission of insolvency on his part. In simple terms, it is called
“voluntary” insolvency because the debtor admits that he cannot pay his obligations as they come due.
He is declared insolvent from the time he admits such (i.e. submission of petition). ASSIGNEE IN
INSOLVENCY - role is in a nature of a receiver. - gathers all the assets of the debtor, and proceeds to
make the inventory. If he discovers some properties of the debtor to be in the possession of third
parties, he must take action to recover them. His main function is to preserve the property and convert
the assets into cash to await the order of the court for the payment of approved claims. 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 than P1000. NATURE OF INVOLUNTARY
INSOLVENCY PROCEEDINGS - An involuntary insolvency isn’t a mere personal action against the
insolvent for the collection of debts; but its purpose is to impound all of his non-exempt property, to
distribute it equitably among his creditors and to release him from further liability. It is an action in rem
and action in persona. STEPS IN INVOLUNTARY INSOLVENCY a. Filing of the petition by three or more
creditors b. Issuance of order requiring the debtor to show cause why he shouldn’t be adjudged
insolvent c. Service of order to show cause d. Filing of answer or motion to dismiss e. Hearing of the case
f. Issuance of order or decision adjudging debtor insolvent g. Publication and service of order h. Meeting
of creditors for election of an assignee in insolvency i. Conveyance of debtor’s property by clerk of court
j. Liquidation of assets and payments of debts k. Composition, if agreed upon