Bankruptcy and how to avoid it

What is bankruptcy?

Your business is having financial problems. Not enough money is coming in, your bank is no longer lending you money and you can no longer pay your bills. If you can no longer make payment arrangements with creditors yourself, the court may declare you bankrupt. The court will appoint a receiver who will take over all decisions and your money matters from you.

Read more about filing for bankruptcy.

KVK offers an overview (pdf, in Dutch) of semi-public organisations that may help you.

Applying for a suspension of payment

Are you temporarily unable to pay your debts? You can ask the court for a suspension of payment. With this, you apply for a moratorium for 1.5 years. This way, you can avoid bankruptcy.

Applying for debt restructuring

Can you no longer pay your debts? Then you can apply for debt restructuring. With a debt counsellor, you will make a plan to solve your debts.

Make an appointment with creditors

Is your business basically profitable, but you can no longer pay your debts? If so, you will want to avoid bankruptcy and prefer controlled closure or a relaunch. You can use the WHOA (Court Approval of a Private Composition (Prevention of Insolvency) Act. You make agreements with your creditors about a debt settlement. You put those agreements in a draft agreement. You then ask the court to approve this agreement. This does not require all creditors to agree to the debt arrangement.

Read more about how to avoid bankruptcy with the WHOA.

Step-by-step guide to dealing with debts

Do you have problematic debts? Talk about it and take action as soon as possible. Check out the step-by-step guide on KVK.nl to find out how to tackle debt.

Filing for bankruptcy

If you can no longer make payment arrangements with creditors, you can file for bankruptcy with the court. Or a customer with whom you have debts can do so. Only the court can declare you bankrupt. If you are declared bankrupt, the judge will appoint a curator. The curator takes over all decisions from you. They look after the interests of creditors and manage all your money matters.

Liability for debts

Your liability for debts depends on the legal structure of your business. If your business is a legal entity, for example a bv or nv, you do not have to pay creditors with your own money. Unless you have co-signed for a debt in a personal capacity. Is your business not a legal personality? For example because you have a sole proprietorship or professional partnership, then you are personally responsible. You have to pay the debts with your own money.

Bankruptcy

A bankruptcy consists of a number of steps. Once your bankruptcy has been filed, there is nothing more you can do. The court and the curator make all the decisions. The curator checks the administration and all your assets. In a verification meeting, the curator looks at your debts and makes a proposal to the creditors. There are 2 possibilities:

• The creditors agree. The court must then approve the debt settlement. Your bankruptcy ends. You pay your debts as the curator has agreed.
• The creditors or the court do not agree. The court then declares insolvency. Your assets are sold to pay your creditors. Whether this also means personal bankruptcy depends on the legal structure of your business.

Starting again after bankruptcy

Bankruptcy does not have to be the end of your business. Sometimes a restart of your business is possible. You can explore this possibility even before the judge declares you bankrupt. This way, you can make a quick restart.

Debts remain

During bankruptcy, the trustee pays off as many debts as possible. If there is not enough money to pay off all debts, these debts will continue to exist. Creditors can still come forward in the future to claim money. Does the bankruptcy end with a creditors' or court approval? Then creditors cannot claim any money after that.