Bankruptcy is a judicial process by which a debtor’s assets are divided among his or her creditors to pay off as much of the debtor’s debt as possible. To achieve these ends, the debtor’s assets will be converted to money in order to be fairly divided among creditors.
Corporate reorganization is a process by which a company can petition the court to help it meet its debt obligations. The court will appoint professionals such as trustees and examiners to work with the company and its creditors to find a way to keep the company afloat. The main focus of corporate reorganizations is usually on preserving as many jobs as possible and maintaining a stable continuation of the company.
If a defendant owes a debt in Japan, or a foreign debt is being enforced against him, but he is unwilling to make payments, a Japanese court can grant a compulsory execution order to force the debtor to pay. This compulsory execution order can be used to enforce the debt against the debtor’s property or assets in Japan. This means that, whether the debtor wants to pay or not, his or her property can be confiscated to pay the debt.
Compulsory execution to forcibly collect a debt in Japan can be used either directly against the debtor and his or her assets, or in certain circumstances, against the debtor’s successor in interest or someone who has taken on the responsibilities of the debtor such as a guarantor.