Bankruptcy procedure

Published by:
Netherlands Chamber of Commerce, KVK
Netherlands Chamber of Commerce, KVK

When your business is in trouble, your bank no longer lends you money and you can no longer pay your bills, the court can declare you bankrupt. Read what the steps are of a bankruptcy procedure.

If your company has financial problems and you are no longer able to pay off your debts, you will go bankrupt or be admitted to a debt restructuring arrangement.

What is bankruptcy?

Your company is in financial trouble; too little money is coming in, your bank no longer lends you money and you are unable to pay your bills. If you can no longer make payment agreements with creditors yourself, the court can declare you bankrupt. The judge appoints a curator (also known as a receiver), who takes care of all decisions and money matters related to your company.

Bankruptcy procedure

Bankruptcy petition

You can file for bankruptcy yourself or your creditors can petition the court for your bankruptcy. If you are a creditor yourself, you can file for your client's bankruptcy. Do you disagree with the court’s judgment? Then you can appeal to the court with the help of a lawyer.

Court proceedings

The court decides whether the bankruptcy petition is justified. In order to defend yourself in court you need to be present or write a statement of defense. For example, when you want to prove that you can still pay your creditors. Or if you want to apply for debt restructuring. If you have been declared bankrupt, you can no longer claim debt restructuring.

Retention phase

Once your bankruptcy petition has been approved, no amendments can be made. From now on the curator takes all decisions, checks your administration and checks all your assets. The details of the bankruptcy are recorded in the Central Insolvency Register (Centraal Insolventieregister). For example, the name of the curator and the date of the bankruptcy.

Waiver due to lack of income

If you have insufficient assets to pay your curator and the administration costs for the bankruptcy, the bankruptcy ends here. However, the debts remain. Creditors can still reclaim debts in the future.

The verification stage

During the verification stage, the curator will check and document your assets. In a verification meeting the curator reviews your debts and makes a proposal to the creditors. The creditors then put the proposal to the vote.

Creditors agree: End of bankruptcy

If the vast majority of creditors agree (bankruptcy agreement) with the curator's proposal, the court must approve this. This is called homologation. If the court approves the proposal, your bankruptcy will end. You pay your debts as agreed by the curator in a so-called ‘distribution list’. Who gets what depends on the ranking of creditors.

Creditors do not agree

If creditors or the court do not agree with the curator's proposal, the court will declare insolvency. This implies that you are unable to pay off your debts. Your assets will be sold to pay your creditors. The curator pays creditors as much as possible. Who gets what depends on the ranking of creditors. The bankruptcy ends, but debts you have not yet paid remain. In the future, creditors may still come forward to claim debts.

New start after bankruptcy

A bankruptcy does not have to be the end of your business; you can make a new start or continue your business practices during bankruptcy.

Questions relating to this article?

Please contact theNetherlands Chamber of Commerce, KVK