Financial difficulties
Filing for bankruptcy
An entrepreneur, who may be a private individual, can file for bankruptcy with the court by himself or bankruptcy can be declared by the court at the request of a creditor. A general partnership or a legal entity can apply for insolvency and can be declared insolvent by the court at the request of a creditor. These are two separate procedures and different requirements apply to both procedures.
Bankruptcy applied for by individual
A lawyer is not required to file a declaration of bankruptcy. However, it is wise to consult with an attorney in the phase immediately preceding the decision to file for bankruptcy to determine whether the risks of continuing the business are (too) great or whether quitting is the best option.
If quitting the business is the best option, it should be determined whether filing for bankruptcy is the appropriate course of action as there are other options that are worth considering. A lawyer can also explain the procedure for filing bankruptcy and prepare the business owner for the role of a trustee.
Bankruptcy applied for by a creditor
If a creditor wants to file for the bankruptcy of a debtor, he must instruct a lawyer to do so. The request is sent to the competent court, after which the court summons the debtor.
How to file for bankruptcy by an individual
After filing a self-declaration or after sending a request for bankruptcy to the court, the debtor is heard in a courtsession closed to the public. The court can declare bankruptcy if the debtor is ‘in the stage of not being able to pay’. There must be ‘summary evidence’ of facts or circumstances that the debtor can no longer pay. If the proceedings are instituted at the request of a creditor, summary evidence of the creditor’s right of action is also required.
Finally, the debtor must prove by providing basic evidence that he is unable to pay debs by presenting several unpaid debts (the support claims). By using the word “basice evidence,” the legislature indicates that normal rules of evidence do not apply. A bankruptcy hearing is a short procedure in which there is little room for detailed evidence. The existence of the right of action and the existence of the supporting claim(s) must be shown after a short and simple examination.
LVH Attorneys & Insolvency
The attorneys at our Rotterdam office have extensive experience in filing for bankruptcy and insolvency, and in defending against bankruptcy petitions. In addition, they have experience as bankruptcy trustees themselves.
We will be happy to help you if you are considering filing for bankruptcy, want to file for bankruptcy of a debtor or want to defend against a bankruptcy petition.
More about Companies in financial difficulties:
Please click further if you would like to know more about how we can advise you on the following areas/topics:
SPECIALIZED LAWYERS
These are our lawyers who are specialized in this area.
Justin de Vries
Furkan Alkilic
Peter de Graaf
More about companies in financial distress
Action on taxation in box 3
As we all know, there has been a lot of recent movement on box 3 taxation. Box 3 primarily taxes savings, investments and real estate. The assets in this box were previously taxed on the basis of a flat rate of return: the tax authorities set an assumed percentage, regardless of the actual return. This meant that many taxpayers paid taxes on a return they had not actually received. You may also have overpaid taxes in the past. If so, chances are you may be eligible for legal redress!
Directors’ liability after turboliquidation
In a recent court case concerning turboliquidation of a catering business, the court ruled that the directors were not personally liable. The case involved the discontinuation of the business without assets, with creditors being paid pro rata. The landlord claimed unlawfulness, but the court held that the turboliquidation had been carried out correctly with no obligation of bankruptcy.
Director’s liability for tax debts
Directors of troubled companies are usually aware that acts performed in the face of bankruptcy (if it comes to that) will be examined by a receiver. Unobligatory legal acts that have harmed creditors may be reversed by the trustee.
