Bankruptcy - General Information
If you have a claim on a firm that is going bankrupt, you enjoy certain forms of protection.
A firm owes you money but it has suspended payments and therefore cannot pay you. The law generally provides for two possibilities in this case:
- Either the firm can be saved; in this case, it will be placed under administration by a court order. The purpose of this procedure is to safeguard the firm, keep its business going, preserve jobs and sort out the liabilities.
- Or the situation is so serious as to justify winding the firm up, which is bankruptcy in layman's language.
In both cases, as soon as the court has given its decision, creditors can no longer proceed individually against the firm. The aim of this principle is to ensure that all creditors are on an equal footing and to protect the debtor's assets.
In order to be paid, you must now prove your claim on the person, generally known as the administrator or liquidator, who is responsible for reorganising or liquidating the debtor's assets.
All the Member States have special rules governing the manner and the time in which claims must be proved.
In most cases, you must send the administrator or liquidator a document containing certain compulsory items of information to indicate that you have a claim on the bankrupt firm. You will have to attach documentary evidence, such as an invoice or an acknowledgement of debt.
You are unlikely to be the only person with a claim on the bankrupt firm, and that firm may not have enough resources to pay all its creditors in full. If so, you must realise that not all claims are treated as equal: some of them enjoy priority, such as those that are covered by a guarantee, and will be paid first.
Click on the flag of the Member State that interests you to obtain the information you need on the formalities for proving your claims there.
There is a recent Community Regulation that makes it far more difficult for a debtor to avoid having to pay his debts by transferring his assets from one Member State to another. Click on the “Community law” icon to find out more.
There is also an international model law on the subject. Click on the “International law” icon to access the full text with explanations.