The effect of operating a bankrupt business on new creditors ("comparative study")

Employing the bankrupt's trade is a system aiming at making the bankrupt debtor whether an individual or company continue their trading after declaring their bankruptcy during the period of the preliminary procedures which begin from the time of declaring the bankruptcy and end with making a reconciliation with the bankrupt or during the period of unification which represents the final stage of bankruptcy . The continuity of running the bankrupt trade needs bankrupt parties to enter into new legal relations with other parties , like workers , importers and financial institutions , That give rise to new creditors . This leads to change in the legal status of the creditors , whether they are old creditors before declaring bankruptcy or new creditors rose due to keeping on running the bankrupt trade . on This basis , creditors fall into two main groups : The creditors before declaring bankruptcy and the new creditors who lent the bankrupt through a guarantee . The latter should submit to investigation , while the former differ from the first group in their legal status towards the bankrupt , their priority to retair their debts and the way of specifying the real creditors vs . the new creditors whether they are creditor in return for certain profits obtained due to their legal personality or the bankrupt himself , being the first indebted .