Bankruptcy application

What we do

As a creditor, bankruptcy of the debtor can be applied for as a last resort. The assistance of a lawyer is required to apply for bankruptcy. In addition, certain conditions must be met before bankruptcy is declared by the court. First, the debtor must have ceased making payments. Second, the debtor must have two or more outstanding debts with different creditors. For at least one of these claims, the payment term must have expired.

To file for bankruptcy, a lawyer must submit a petition to the court. Subsequently, the hearing will take place. The bankruptcy petitioners and the debtor will receive an invitation to the hearing. The debtor may submit a defense against the petition before the hearing takes place. After this, the hearing will take place, and the bankruptcy petitioners are required to be present. The debtor is not obliged to attend the hearing. If the debtor is not present, he will be declared bankrupt by default judgment. A ruling following the hearing will be issued within one to two weeks after the hearing. We have in-house lawyers who provide legal support for the bankruptcy application.

It is also possible to file for personal bankruptcy. The same conditions must be met to file for personal bankruptcy. The petitioner must therefore have ceased making payments and have two creditors, with at least one of whom has a payment term that has expired. No lawyer is required to file for personal bankruptcy. As a natural person, it can in many cases be beneficial to make use of the Debt Restructuring Act for Natural Persons (Wsnp). If the conditions are met, this can lead to a so-called “clean slate” for the debtor.

A voluntary bankruptcy application is filed using the Self-Declaration of Bankruptcy Form. Subsequently, a hearing will take place. The petitioner for bankruptcy must be present at this hearing if they receive a summons. A person who co-signed the application must also appear. The judge will then issue a ruling within one to two weeks. When filing for voluntary bankruptcy, it is advisable to engage one of our legal specialists. We are happy to review the options and risks involved in filing for voluntary bankruptcy together with the client.

Questions regarding filing for bankruptcy? Contact us.

Application for bankruptcy under insolvency law

Filing for bankruptcy is one of the most far-reaching instruments within Insolvency Law. Unlike ordinary debt collection proceedings, bankruptcy affects not a single claim, but the debtor's entire assets: following the declaration of bankruptcy, the management and disposal of the assets pass into the hands of a trustee appointed by the court, who liquidates the assets for the benefit of the collective creditors. Therefore, anyone filing for bankruptcy opts for a collective settlement rather than individual recovery. At MKB Juristen, our lawyers and in-house counsel assist both the creditor considering this means of pressure and the company facing a bankruptcy application – from an international group to the baker on the corner.

Legal conditions: plurality and the support claim

Pursuant to Article 1 of the Bankruptcy Act, a debtor is declared bankrupt when he is in a state of having ceased to pay. The court does not derive this state from a single unpaid bill: there must be a plurality of creditors. This plurality requirement is not explicitly included in the law, but follows from settled case law of the Supreme Court and is linked to the purpose of bankruptcy – the distribution of assets among the collective creditors. In concrete terms, this means that the applicant must demonstrate at least one other unpaid creditor in addition to his own claim. The claim of that other creditor is called the supporting claim.

The threshold for a supporting claim is low: the claim does not need to be established or due, nor does it need to be known, and the exact amount needs not be known. The judge only briefly assesses whether the conditions have been met; an in-depth investigation into the merits of the claims does not take place in bankruptcy proceedings. However, the applicant's own claim must be sufficiently plausible. Our legal experts ensure that both the applicant's own claim and the supporting claim are properly substantiated, so that the application does not fail on this point.

The step-by-step procedure and the costs

The application is made by means of a petition filed by a lawyer with the court of the district where the debtor is established or resides. After filing, the court sets a hearing date, usually within a few weeks. Both the applicant and the debtor are summoned; the debtor may present a defense beforehand or at the hearing. If the debtor fails to appear, a declaration of bankruptcy in absentia may follow. The court usually issues a ruling within one to two weeks.

Take costs into account. Court fees are payable for the processing of the petition, and there are additional legal assistance costs. A bankruptcy application often serves as a means of pressure: it is not uncommon for the debtor to pay or make an arrangement as soon as the application is filed, allowing the petition to be withdrawn. We discuss the costs and opportunities transparently in advance, whether you are a large company or a small business owner looking to put pressure on a persistent debtor.

Consequences of the declaration of bankruptcy and the role of the trustee

With the bankruptcy judgment, the bankrupt loses control and disposal of their assets. The court appoints a trustee and a supervisory judge. The trustee inventories the estate, verifies creditors' claims, and distributes the proceeds according to the statutory order of priority, whereby preferential creditors (such as the Tax Authorities and employees) take precedence over concurrent creditors. For the petitioning creditor, this means that they share in the estate but do not receive priority simply because they filed for bankruptcy. We provide a realistic overview in advance of the recovery options remaining after a declaration of bankruptcy.

Directors' liability in the event of bankruptcy

In bankruptcy, the trustee can hold the director of a bankrupt company personally liable. In the event of manifestly improper management that is a major cause of the bankruptcy, the director can be held liable for the deficit in the bankruptcy estate pursuant to Article 2:248 of the Dutch Civil Code. If the board has failed to file the annual accounts on time or has not kept the bookkeeping in order, the improper management is established and the causal link is presumed. In addition, the Beklamel standard applies: a director who enters into obligations on behalf of the company while knowing or ought to know that the company cannot fulfill them and offers no recourse may be held personally liable. For creditors, this can open an additional avenue of recourse; for directors, it is a serious risk. You can read more about this on our Directors' Liability.

Defense, objection and appeal

The debtor is not powerless. A substantive defense can be raised against the request, for example by contesting the claim or the supporting claim with reasoned arguments, or by demonstrating that there is no state of cessation of payments. If bankruptcy has been declared in absentia, opposition may be lodged within fourteen days of the judgment; if the decision has been made in adversarial proceedings, an appeal may be lodged with the Court of Appeal, also within fourteen days. Our lawyers conduct both the defense against an application and the opposition or appeal, and assess whether a payment arrangement or withdrawal is feasible.

Alternatives: suspension of payments, creditors' agreement, and debt restructuring

Bankruptcy is not always the best route. For a company that is fundamentally viable, a suspension of payments offer breathing space, or a compulsory agreement with creditors can be reached through a creditors' agreement (including the WHOA). For natural persons, debt restructuring (Wsnp) often represents a more attractive way out, with the prospect of a clean slate. Our lawyers and corporate counsel will assess with you which instrument best suits your position as a creditor or debtor.

Frequently asked questions about filing for bankruptcy

Can I file for bankruptcy with a single claim? You can file, but plurality is required for the declaration of bankruptcy: in addition to your own claim, you must demonstrate at least one supporting claim from another creditor.

Do I need a lawyer? Legal assistance from a lawyer is mandatory for filing for another person's bankruptcy. It is not necessary for filing for your own bankruptcy, although legal advice is highly recommended.

How long does the procedure take? The hearing usually takes place within a few weeks of filing, and the court typically makes a decision within one to two weeks thereafter.

What does a bankruptcy application cost? You pay court fees and legal aid costs. Because the application often already acts as a means of pressure, it frequently leads to payment or a settlement even before a declaration of bankruptcy is issued.

What if the debtor disputes my claim? The judge conducts only a summary review. In the event of a serious and substantiated defense, the court may rule that the claim is not sufficiently plausible and reject the application; therefore, proper substantiation is essential.

Why SME Lawyers

MKB Juristen works with mixed teams of lawyers and in-house counsel. As a result, we combine the clout of court litigation with practical, commercial advice on whether filing for bankruptcy is the right course of action. We assist both creditors seeking to secure their position and entrepreneurs facing a bankruptcy application – from international corporations to the baker on the corner. Contact us for an initial assessment of your case.