Resolving Insolvency

Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit.

What the Indicator Measure

  • Measured in calendar years

    Measured in calendar years

  • Appeals and requests for extension are included

    Appeals and requests for extension are included

  • Measured as percentage of estate value

    Measured as percentage of estate value

  • Court fees

    Court fees

  • Fees of insolvency administrators

    Fees of insolvency administrators

  • Lawyers’ fees

    Lawyers’ fees

  • Assessors’ and auctioneers’ fees

    Assessors’ and auctioneers’ fees

  • Other related fees

    Other related fees

  • Whether business continues operating as a going concern or business assets are sold piecemeal

    Whether business continues operating as a going concern or business assets are sold piecemeal

  • Measures the cents on the dollar recovered by secured creditors

    Measures the cents on the dollar recovered by secured creditors

  • Outcome for the business (survival or not) determines the maximum value that can be recovered

    Outcome for the business (survival or not) determines the maximum value that can be recovered

  • Official costs of the insolvency proceedings are deducted

    Official costs of the insolvency proceedings are deducted

  • Depreciation of furniture is taken into account

    Depreciation of furniture is taken into account

  • Present value of debt recovered

    Present value of debt recovered

  • Sum of the scores of four component indices:

    Sum of the scores of four component indices:

  • Commencement of proceedings index (0-3)

    Commencement of proceedings index (0-3)

  • Management of debtor’s assets index (0-6)

    Management of debtor’s assets index (0-6)

  • Reorganization proceedings index (0-3)

    Reorganization proceedings index (0-3)

  • Creditor participation index (0-4)

    Creditor participation index (0-4)

Institutions under this Indicator

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