Debt restructuring

What we do

If it is not possible to reach a payment arrangement with all creditors, an application for statutory debt restructuring can be submitted to the court. Debt restructuring is available only to natural persons, owners of a sole proprietorship, partners of a General Partnership (VOF), and managing partners of a Limited Partnership (CV).

To be eligible for the Debt Restructuring Act for Natural Persons (Wsnp), a number of conditions must be met. Firstly, it must not be possible to pay off the debts oneself. Secondly, an attempt must have been made to repay the debts through debt assistance. Furthermore, use of the Wsnp must not have been made for ten years, subject to a number of exceptions where the court may still grant Wsnp. Moreover, the applicant must have acted in good faith regarding the non-payment of debts over the past five years. In the case of addiction or psychosocial problems, confirmation of a check by a debt counselor must be provided. The debts must also not arise from committed crimes. Finally, the applicant must comply with the obligations of the Wsnp and must make every effort to earn as much money as possible.

An application for the Wsnp is submitted to the court. Subsequently, a hearing will take place. If the applicant is not present at the hearing, the application will be rejected. Within one to two weeks after the hearing, the judge decides whether the Wsnp is granted.

When applying for the Wsnp, it is advisable to engage legal assistance to discuss the options. Additionally, it is possible to lodge an appeal and appeal to the Supreme Court against the rejection of the Wsnp.

Questions about debt restructuring? Please contact us.

Debt restructuring at MKB Juristen: from the baker on the corner to an international corporation

Debts come in all shapes and sizes. Sometimes it involves an entrepreneur with a sole proprietorship who runs into difficulties due to setbacks, other times it concerns a company within a larger group that can no longer meet its obligations to creditors. At MKB Juristen, lawyers and in-house counsel work together in mixed teams, enabling us to assist both the self-employed individual and the international group. We assess which route is the best fit: an amicable settlement with creditors, statutory debt restructuring (Wsnp), or a corporate restructuring. Debt restructuring is part of the broader field of Insolvency Law, within which we guide you through the entire process.

The amicable route: first try without a judge

Before statutory debt restructuring comes into play, the amicable settlement process must first be completed. This means that, with the help of debt counseling, you attempt to reach a payment arrangement or debt settlement with all your creditors. If this is unsuccessful, a statement is required confirming that the amicable settlement process failed; this statement is a condition for admission to the Wsnp. We help entrepreneurs present a realistic and well-substantiated proposal to their creditors, so that recourse to the courts can potentially be avoided.

Compulsory settlement: forcing an unwilling creditor to cooperate

It sometimes happens that virtually all creditors agree to a debt settlement, but that one creditor continues to refuse. Article 287a of the Bankruptcy Act (Fw) offers a solution for this situation: the so-called compulsory settlement. The judge can compel a creditor, who could not reasonably have refused, to agree to the proposed settlement. In doing so, the judge weighs, among other things, what the creditor is being offered against what they would receive in the event of bankruptcy or a Wsnp (Debt Restructuring Scheme). A well-motivated request is decisive in this regard; our legal experts will draft the petition for you and assist you at the hearing.

Interim relief and moratorium: gaining time in a threatening situation

If there is a threat of irreversible consequences in the short term, such as eviction, disconnection of gas, water, or electricity, or cancellation of health insurance, the judge may order a preliminary injunction or a moratorium. Pursuant to Article 287b of the Dutch Bankruptcy Act (Fw), the judge may order a cooling-off period of up to six months, during which the threatening situation is frozen while the amicable settlement process is underway. Additionally, a preliminary injunction may be requested pursuant to Article 287, paragraph 4, of the Dutch Bankruptcy Act (Fw). This creates space and calm to reach a lasting solution.

The administrator and your obligations during debt restructuring

If you are admitted to the Wsnp, the court appoints an administrator to supervise the execution. A strict regime applies during the process: you must contribute as much income as possible above the exempt amount to the estate, you may not incur new debts, you have an obligation to apply for jobs and make an effort, and you must inform the administrator fully and in a timely manner. If you fail to comply with these obligations, the debt restructuring may be terminated prematurely without a clean slate. We will explain exactly what the scheme expects of you in advance, so that you will not face any surprises.

The clean slate: a new start after the process

Since the legislative amendment of February 10, 2023, statutory debt restructuring generally lasts eighteen months, shorter than the previous term of three years. If you fulfill your obligations, the process ends with a so-called clean slate. Pursuant to Article 358 of the Dutch Bankruptcy Act (Fw), the debts covered by the debt restructuring scheme are no longer enforceable thereafter, not even for creditors who did not participate. However, pursuant to Article 354 of the Dutch Bankruptcy Act (Fw), the court may rule that you are liable for a breach of contract; in that case, the clean slate will not be granted. Careful compliance with the scheme is therefore essential for a genuine new start.

Debt restructuring or reorganization? The choice for businesses

Statutory debt restructuring is only available to natural persons, such as the owner of a sole proprietorship, partners in a general partnership (VOF), or managing partners of a limited partnership (CV). The Wsnp is not intended for private or public limited companies. For legal entities with viable activities, the Private Agreement Homologation Act (WHOA), which has been incorporated into the Bankruptcy Act since January 1, 2021, offers an alternative. Under the WHOA, a company can restructure its debts outside of bankruptcy via a compulsory agreement, whereby dissenting creditors and shareholders can also be bound. Unlike in bankruptcy, where a trustee takes over management, the entrepreneur retains control over their company under the WHOA. Together with you, we will assess which route—debt restructuring or reorganization—best suits your situation.

Appeal and cassation upon rejection

If your application for admission to the Wsnp is rejected or the process is terminated prematurely, legal remedies are available. Many decisions in the debt restructuring procedure can be appealed to the Supreme Court and subsequently filed for cassation. Legal assistance from a lawyer is mandatory for this. The lawyers at MKB Juristen assess whether an appeal has a chance of success and conduct the proceedings for you, ensuring that you are not left without a solution.

Why MKB Juristen for debt restructuring?

Debt restructuring often touches upon other areas of insolvency law: impending bankruptcy, directors' liability, a restart, or restructuring via the WHOA. By combining lawyers and in-house counsel in one team, we have an overview of the entire playing field and choose the route that best serves your interests. Whether you are the baker on the corner or part of an international group, we think practically and act decisively.

Questions about debt restructuring?

Do you have questions about statutory debt restructuring, a compulsory settlement, a moratorium, or the restructuring of your company? Please contact us. Our Insolvency Law will review the options available in your situation without obligation.