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.
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SPECIALIZED LAWYERS
These are our lawyers who are specialized in this area.
Justin de Vries
Peter de Graaf
Furkan Alkilic
More about companies in financial distress
Termination of banking relationship by bank
It is increasingly common for banks to terminate a relationship with a customer - sometimes dating back many years. Such termination of a banking relationship can have serious consequences for a business owner. Can a bank terminate a credit relationship? When is it allowed and when is it not? Below is a brief explanation of the background to such termination and the rights and obligations of banks and account holders.
Reduction of amount for which the director is liable
A director is liable under article 2:248 paragraph 1 of the Dutch Civil Code (BW) to make good the deficit in the bankruptcy if the board has manifestly mismanaged its duties and it is plausible that this was a major cause of the bankruptcy. Based on paragraph 4 of this article of law, the court can mitigate the amount for which the director is liable under certain circumstances.
The wage guarantee scheme: continued payment of wages in the event of the employer’s bankruptcy
The Unemployment Insurance Act includes a scheme that entitles employees to payment in the event of payment problems on the part of the employer. The regulation is also called the wage guarantee regulation. It also regulates which benefits an employee can claim in case of bankruptcy of the employer. In this article I will discuss the main provisions of the wage guarantee scheme that apply in the event of bankruptcy and I will go into a recent judgment of the Supreme Court on this subject.
