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:
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SPECIALIZED LAWYERS
These are our lawyers who are specialized in this area.
Peter de Graaf
Furkan Alkilic
Justin de Vries
More about companies in financial distress
Fiscal support measures during Corona crisis
On the 17th March 2020, the Cabinet announced a large number of measures. These measures are aimed at supporting companies and freelancers. The measures include measures to maintain employment on the one hand and measures to ensure that companies do not go bankrupt and that self-employed people can maintain an income on the other hand.
Bill on Homologation Private Placement Significant change in insolvency law is imminent
A very important change in insolvency law is imminent. This change concerns the possibility of a debtor's offering a composition to creditors. In the current situation, there is only an arrangement for the compulsory imposition by the court of an arrangement with creditors in suspension of payments or bankruptcy. In the Bill on the Homologation of Private Agreements (WHOA), the possibility has been included that a compulsory composition without a moratorium or bankruptcy can be concluded. This will drastically change the possibilities for resolving problematic debts. This change is important for debtors, but also for their providers of capital, such as creditors and shareholders.
