For example, you have a business in which you are running with neither profit nor loss, and the economic forecast foresees an increase only after one year. At the same time, you have 10 creditors to whom you owe a total of MDL 1 million, which you have to pay off in about 6 months.
The value of your company allows you to recover about MDL 1 million in a sale of assets and to pay off the 10 creditors in full, but you are left without resources, therefore you cannot keep your employees, offices, rents and you cannot invest in the future you are waiting for.
One of the options is to default on your debts even when they are due in order to try to invest in the near future and make an effective breakthrough in business prosperity.
The risk of default to one or more creditors will generate the creditors to start enforcement proceedings, and in the case of 10 creditors, we have 10 proceedings, 10 bailiffs, 10 enforcement files with separate expenses. On the background of enforcement proceedings, which essentially cannot be stopped, the chances of getting out of the economic decline and not ending up in default are minimal.