Insolvency can be defined as the inability to meet long-term obligations, which ultimately leads to bankruptcy. Bankruptcy can be defined as a legal proceeding that takes place when a company is insolvent and creditors seek to be compensated. This thesis presents how bankruptcy occurs and how it is conducted. Additionally, for the purpose of comparison, the characteristics and the process of pre-bankruptcy proceedings are briefly outlined. Furthermore, through examples of companies, it is shown how financial failure prediction models, efficiency, liquidity, and indebtedness indicators, as well as vertical and horizontal analysis methods, can indicate business disruptions. Using the method of analysis, companies undergoing bankruptcy proceedings were compared. Financial indicators were considered to determine whether, in the years leading up to the deterioration of business operations of the selected companies, it was possible to timely detect the emergence of insolvency conditions and the risk of bankruptcy based on financial indicators and failure prediction models. The aim of this thesis is to investigate the bankruptcy procedure in the Republic of Croatia and, through theory and examples, analyze the possibility of predicting the risk of insolvency and bankruptcy, as well as the success of bankruptcy proceedings. The research question sought to answer whether it was possible, based on risk indicators and models, to react in time and prevent bankruptcy proceedings. The methods used in this thesis include the comparison method, the statistical method, the analysis method, and the descriptive method.