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Insolvency and creditor claims in Mexico: the concurso mercantil test, the stay, conciliation of up to 365 days, prepackaged plans, ranking of claims and cross border cases

Last verified: 2026-10-26 · Status: Stable

A merchant is declared in concurso mercantil by a federal district judge when it defaults on payments to two or more creditors and, for a creditor's petition, both obligations at least 30 days overdue reach 35 percent of all its obligations and its liquid assets cover less than 80 percent of overdue obligations. The judgment stays attachments and enforcement and suspends payment of prior debts during a conciliation stage of 185 days, extendable twice by 90 days to a hard cap of 365, in which a restructuring agreement needs the signatures of creditors holding more than half of recognized claims; otherwise the company goes into bankruptcy. Workers' claims for the two years of wages before the filing are paid ahead of everyone, secured creditors are paid from their collateral, labor and tax claims come next, then common creditors pro rata, and a prepackaged filing signed by holders of a simple majority of debts skips the inspection step.

USD conversions use MXN 18.5026 per US dollar, the US Federal Reserve H.10 noon buying rate in New York for 16 October 2026 (FRED series DEXMXUS), the latest observation available when this page was verified. Conversions are for orientation only.

Key facts

Share of obligations at least 30 days overdue that triggers the insolvency test	35 %Ley de Concursos Mercantiles art. 10, section I, as of 2026-10-26 · in force
Liquid assets below this share of overdue obligations meet the insolvency test	80 %Ley de Concursos Mercantiles art. 10, section II, as of 2026-10-26 · in force
Initial length of the conciliation stage	185 daysLey de Concursos Mercantiles art. 145, as of 2026-10-26 · in force
Maximum length of conciliation including extensions	365 daysLey de Concursos Mercantiles art. 145, as of 2026-10-26 · in force
Creditor majority needed for a restructuring agreement	More than 50 percent of recognized claims (common and subordinated plus signing secured) Ley de Concursos Mercantiles art. 157, as of 2026-10-26 · in force
Retroaction (lookback) period before the concurso judgment	270 daysLey de Concursos Mercantiles art. 112, as of 2026-10-26 · in force
Cross border insolvency rules based on the UNCITRAL Model Law	Yes, Title Twelve of the Ley de Concursos Mercantiles Ley de Concursos Mercantiles arts. 278 onwards, as of 2026-10-26 · in force

The rule

1. The insolvency test: generalized default. A merchant (including a business trust and controlling or controlled companies) is declared in concurso mercantil when it generally defaults on its payment obligations, which means default to two or more different creditors plus: (I) obligations at least 30 days overdue represent 35 percent or more of all its obligations at the filing date; and (II) it lacks liquid assets (cash and demand deposits, deposits and investments and receivables due within 90 days, and regularly traded securities saleable within 30 banking days) to cover at least 80 percent of its overdue obligations. A merchant filing for itself must meet either condition; a creditor or the public prosecutor must prove both. Default is presumed, among other cases, if there are no assets to attach, payments to two or more creditors are missed, or the merchant disappears or closes its premises without leaving someone in charge.
Cost to do it: The court appoints an inspector (visitador) to verify the test in a contested filing; the debtor must supply the books and resources for publications and registrations (art. 43, section VI).Ley de Concursos Mercantiles, DOF 12 May 2000 (Chamber of Deputies consolidated text, last reform DOF 14 November 2025), Arts. 4 (section II), 9, 10 and 11, 2000-05-12 official text · verified 2026-10-26

2. Who files, and where. The merchant itself may file, attaching three years of financial statements (audited where required), a report on the causes, the list of creditors and debtors with guarantees, an inventory of assets and the list of lawsuits. Any creditor or the public prosecutor may file against it, and creditors may ask to open directly in bankruptcy; if the merchant does not accept, the case opens in conciliation. The competent court is the federal district judge of the merchant's domicile; filings for group companies can be joined before the judge of the first case.
Cost to do it: No court fee; professional costs for the financial statements and the filing package.Ley de Concursos Mercantiles, DOF 12 May 2000 (Chamber of Deputies consolidated text, last reform DOF 14 November 2025), Arts. 17, 20 and 21, 2014-01-10 official text · verified 2026-10-26

3. The judgment: stay, payment freeze and lookback. The judgment opens conciliation (unless bankruptcy was requested), orders the specialist institute (IFECOM) to appoint a conciliator at random, orders the merchant to suspend payment of debts incurred before the judgment except those indispensable for ordinary operations (including credit needed to keep operating, reported to the judge within 72 hours), and stays every attachment or enforcement order against the merchant's assets until conciliation ends. The stay does not cover labor enforcement for wages of the two years before the filing; tax enforcement procedures are suspended during conciliation, but ordinary taxes and social security keep being paid. Acts in fraud of creditors are ineffective against the estate; from the retroaction date (270 calendar days before the judgment, doubled for related subordinated creditors and extendable by the judge up to three years), gifts, transactions at clearly off market values, debt forgiveness and early payments of debts not yet due are presumed fraudulent.
Cost to do it: Creditors bear the cost of the stay: secured and unsecured enforcement waits until conciliation ends.Ley de Concursos Mercantiles, DOF 12 May 2000 (Chamber of Deputies consolidated text, last reform DOF 14 November 2025), Arts. 43 (sections IV, VIII, IX and X), 65, 69, 112, 113 and 114, 2014-01-10 official text · verified 2026-10-26

4. Conciliation: 185 days, two extensions, a 365 day cap. Conciliation lasts 185 calendar days from the last publication of the judgment in the Federal Official Gazette. The conciliator or recognized creditors with more than 50 percent of recognized claims may obtain an extension of up to 90 days if an agreement is close, and the merchant with creditors holding at least 75 percent may obtain a further 90 days. In no case may conciliation and its extensions exceed 365 calendar days; when the period ends the judge certifies it and the merchant is deemed in bankruptcy.
Cost to do it: The conciliator's fees are paid by the estate as a claim against the estate (art. 224).Ley de Concursos Mercantiles, DOF 12 May 2000 (Chamber of Deputies consolidated text, last reform DOF 14 November 2025), Arts. 145 and 167, 2014-01-10 official text · verified 2026-10-26

5. The restructuring agreement: more than half of recognized claims. To be effective, the agreement must be signed by the merchant and recognized creditors representing more than 50 percent of the sum of all common and subordinated recognized claims plus the secured or specially privileged recognized claims that sign it. If related party subordinated creditors hold at least 25 percent of the relevant claims, the majority must be reached excluding them (unless they accept the others' terms). The proposal is put to creditors for 15 days, and the conciliator files the signed agreement ten days later.
Cost to do it: Related party creditors with large intercompany claims cannot carry the vote alone (art. 157).Ley de Concursos Mercantiles, DOF 12 May 2000 (Chamber of Deputies consolidated text, last reform DOF 14 November 2025), Arts. 157 and 161, 2014-01-10 official text · verified 2026-10-26

6. Prepackaged filings. A merchant may file a concurso with a restructuring plan signed together with holders of at least a simple majority of its total debts, stating under oath that it meets the insolvency test or that it will inevitably meet it within 90 days, and attaching the plan; if the filing meets the requirements, the judge declares the concurso without appointing an inspector.
Cost to do it: Skipping the inspector saves time and its cost; the plan still needs the art. 157 majorities to be approved.Ley de Concursos Mercantiles, DOF 12 May 2000 (Chamber of Deputies consolidated text, last reform DOF 14 November 2025), Arts. 339 and 341, 2014-01-10 official text · verified 2026-10-26

7. Ranking of claims. Claims against the estate are paid first, in this order: workers' constitutional priority claims (Constitution art. 123, section A, XXIII), debts for administering the estate or indispensable operating credit authorized by the conciliator or receiver, costs of securing and preserving estate assets, and costs of proceedings for the estate. Then come, in grades: singularly privileged creditors, secured creditors (mortgage and pledge) paid from their collateral with absolute exclusion of lower grades, other labor claims and tax claims (paid after secured claims but before special privileges), specially privileged creditors, common creditors pro rata, and subordinated creditors (contractually subordinated and certain related parties). No grade is paid until the prior one is paid in full. Against secured creditors, only workers' claims for the two years of wages before the filing and the costs of defending and selling the collateral rank ahead.
Cost to do it: Taking registered security (mortgage, pledge or guarantee trust) is the main way to rank ahead of tax and labor claims.Ley de Concursos Mercantiles, DOF 12 May 2000 (Chamber of Deputies consolidated text, last reform DOF 14 November 2025), Arts. 217, 218, 219, 221, 222, 222 Bis, 223, 224 and 225, 2014-01-10 official text · verified 2026-10-26

8. Cross border insolvency: the Model Law. Title Twelve applies when a foreign court or representative seeks assistance in Mexico for a foreign insolvency proceeding, when assistance is sought abroad for a Mexican case, when proceedings run in parallel, and when foreign creditors want to start or join a Mexican case. It distinguishes the foreign main proceeding (centre of main interests) from non main proceedings (an establishment), applies unless a treaty provides otherwise and except where there is no international reciprocity, and allows the judge, inspector, conciliator and receiver to cooperate and communicate directly with foreign courts and representatives without letters rogatory.
Cost to do it: Recognition of a foreign proceeding avoids opening a full Mexican concurso when the debtor's centre of main interests is abroad.Ley de Concursos Mercantiles, DOF 12 May 2000 (Chamber of Deputies consolidated text, last reform DOF 14 November 2025), Arts. 278, 279, 280 and 304, 2000-05-12 official text · verified 2026-10-26

Rank	Creditors	Rule
1	Claims against the estate: workers' constitutional priority, estate administration and authorized operating credit, preservation costs, proceedings for the estate	Art. 224
2	Singularly privileged (funeral and last illness of an individual merchant)	Art. 218
3	Secured (mortgage, pledge), from their collateral	Art. 219
4	Other labor claims and tax claims	Art. 221
5	Specially privileged	Arts. 217, 220
6	Common, pro rata	Art. 222
7	Subordinated (contractual and certain related parties)	Art. 222 Bis

Order of payment in a Mexican concurso, verified 26 October 2026 against the Ley de Concursos Mercantiles.

Worked example

A Mexican auto parts supplier owes MXN 185,026,000 (about USD 10,000,000) in total. MXN 74,010,400 (40 percent) is more than 30 days overdue, owed to five creditors, and its cash, 90 day receivables and listed securities total MXN 37,005,200, which is 50 percent of the overdue amount. Both conditions of art. 10 are met, so a creditor can obtain the declaration.
From the judgment, attachments stop and conciliation runs 185 days from publication (art. 145). A restructuring agreement needs creditors with more than half of the recognized claims (art. 157); a US parent holding a large intercompany loan may be outvoted if related party claims reach 25 percent.
If no agreement is signed within 365 days, the company is in bankruptcy: secured lenders are paid from their collateral, then labor and tax claims, then common creditors pro rata (arts. 219, 221 and 222).

Step by step

1. Monitor the two art. 10 ratios for key customers and for your own Mexican subsidiary.
2. Take registered security (mortgage, pledge or guarantee trust) for large exposures; it ranks ahead of tax and labor claims.
3. On a customer's concurso, file your claim in the recognition procedure and track the publication date that starts the 185 days.
4. Review payments received in the 270 days before the judgment for fraud of creditors risk (arts. 112 to 114).
5. For a group restructuring, consider a prepackaged filing with holders of a simple majority of debts (art. 339).
6. If the main case is abroad, seek recognition and cooperation under Title Twelve rather than a separate full concurso.

Common traps

Enforcing during conciliation. Attachments and enforcement orders are stayed until conciliation ends (art. 65).
Collecting early. Payments of debts not yet due made after the retroaction date are acts in fraud of creditors (art. 114, section V).
Counting on intercompany votes. Related party claims above 25 percent are excluded from the majority (art. 157).
Missing the 365 day cap. There is no further extension; the company is deemed bankrupt (art. 145).
Assuming the stay stops wage claims. Labor enforcement for the last two years of wages continues (art. 65).

Sources

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