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Bankruptcy - Netherlands

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1. What kinds of insolvency proceedings exist and what are their objectives? 1.
2. What are the conditions for each of these proceedings? 2.
3. What role do the participants have in each type of proceedings? 3.
4. What are the consequences of starting the proceedings? 4.
5. What special rules apply to certain types of claims? 5.
6. What rules are applied to transactions that are detrimental to the estate? 6.
7. What are the conditions for submitting and verifying debt claims? 7.
8. What directives apply to the reorganisation and restructuring? 8.
9. What directives apply to the liquidation? 9.
10. What are the conditions for termination of the proceedings? 10.


1. What kinds of insolvency proceedings exist and what are their objectives?

The Bankruptcy Act (BA) recognises three different types of judicial insolvency proceedings: Bankruptcy, Moratorium and Debt Restructuring.

In the Netherlands all three types are included in Addenda A, B and C to the European Insolvency Decree (EC) no. 1346/2000 of 29 May 2000 L 160 (changed in January 2005, COM 2004, 827).


In the case of bankruptcy the debtor (entrepreneur or private individual) must be in the situation where he has ceased to make payments (according to Section 1 of the Bankruptcy Act (BA).

In the case of moratorium the debtor must foresee that he will not be able to continue paying his due debts (Section 214 BA). The moratorium proceedings are reserved for entrepreneurs.

In the case of the Debt Restructuring for Natural Persons Act – see Section 284 of the Bankruptcy Act:

  • either it can reasonably be foreseen that the person will not be able to continue paying his debts,
  • or the person is in the situation of having ceased to make payments.


The sole objective of bankruptcy proceedings is liquidation of the available equity to distribute among the creditors.

The moratorium proceedings have a restructuring objective rather than liquidation in order to prevent the latter.

The debt restructuring proceedings in Court have a double objective: liquidation of the available equity and restructuring of the debt burden.

2. What are the conditions for each of these proceedings?


  • Bankruptcy: the debtor must be in the situation where he has ceased making payments. This means that there is at least a due debt and a claim for support (Section 6 BA).

The Bankruptcy Act does not require any (judicial or extrajudicial) preparatory proceedings. The Court does however require a well-founded petition.


  • In the case of moratorium the debtor must foresee that he will not be able to continue paying his due debts (Section 214 BA).
  • Several criteria apply to the debt restructuring arrangement:

Prior to application of the legal debt restructuring arrangement the law imposes mandatory pursuit of an extrajudicial phase. On the grounds of a model statement issued by the municipality it must be evident that there have been attempts to reach an amicable settlement. Why these attempts have been in vain must also be evident. The debt assistance provision at a local level supports this so-called amicable phase.

The following applies when applying debt restructuring:

  1. An incurable debt burden must be involved; in other words there is no prospect of repayment.
  2. The debtor must enclose a model statement with the restructuring application, completed by the municipality and signed by him in person, and must also submit a complete petition to the Court as described in Section 285 BA.
  3. The debts must have arisen or remained unpaid in good faith. The Court will interpret this open criterion in each case. Debts from criminal acts are not regarded as arising in good faith. In accordance with jurisprudence from the Supreme Court and the Directives of judicial policy it is important here that no attempts have been made to disadvantage creditors. It is also important that the debts have not arisen or remained unpaid very recently and that where in any way possible there has been partial repayment along with its frequency. In other words there is no consequent pattern of incurring debts without demonstrable improvement.

For whom?

  • Bankruptcy is open to both natural persons and corporate bodies.
  • Moratorium is not granted to a natural person who does not practice an independent profession or business, nor is this the case for an insurer.
  • Debt restructuring is only open to natural persons.
In principle this means that all private individuals may submit an application, as may those enterprises that are not operated in the form of a corporate body, such as the one-man business.
  • Bankruptcy can be applied for by the debtor himself (own declaration) or by a creditor, or by the Public Ministry for reasons in the public interest.
  • The debtor himself can apply for Moratorium provided that this party is not a natural person. Creditors may not therefore apply for moratorium.
  • The natural person who has a debt burden such that there is no prospect of repayment and who submits a complete petition for debt restructuring to the Court and who moreover is in good faith according to the Court. Creditors may not therefore apply for debt restructuring.

The Clerk to the Court should publish in the State Gazette a number of key items of data from the pronouncement of the Court in which the bankruptcy, moratorium or debt restructuring proceedings are opened. Among other things this involves the name and full address of the debtor and the name of the acting supervisory judge and the appointed receiver.


3. What role do the participants have in each type of proceedings?

The Court takes the most consequential decisions in the bankruptcy and in the debt restructuring arrangement, such as admission or refusal of the proceedings and granting discharge in debt restructuring, or a levy from the bankruptcy or a possible interim termination of debt restructuring. The Court may also dismiss the receiver or administrator if he neglects his legal duties.

An acting supervisory judge is appointed from the Court for the numerous decisions of management and supervision of the estate during the term of the proceedings. This individual supervises the receiver or administrator, grants permission for some transactions and decides on possible complaints from interested parties.

As soon as the Court has opened insolvency proceedings, it appoints both a supervisory judge and an administrator (in bankruptcy) or receiver (in moratorium or debt restructuring). The tasks of the administrator and receiver are described as follows in the Act: supervision of compliance by the debtor with the obligations arising from the law, and managing and liquidating the estate. These tasks apply regardless of whether the debtor is a private person or an enterprise.

In the moratorium arrangement the receiver must conduct the management of the estate together with the debtor.

  • A bankruptcy is sometimes declared on the debtor’s own initiative, but this is generally done on the initiative of a creditor. If this is rejected the creditor has the right of higher appeal if it is admitted that the debtor has a right of higher appeal. On behalf of the creditors the administrator can nullify certain legal transactions conducted by the debtor up to one year before the bankruptcy that have resulted in creditor disadvantage, for example a sale of valuable property well below market value. The verification meeting offers creditors the chance to have their say. Creditors may submit a complaint about the administrator to the supervisory judge (Section 69 BA).

Duty of effort in debt restructuring: the debtor who is admitted to the debt should exert maximum effort for his creditors for a period of three years, so that as much money as possible comes into the estate. For three years he will have to make his capacity to repay available to his creditors up to 95% of the applicable support level.


Duty of information in bankruptcy and debt restructuring: inform the administrator or receiver fully and accurately about everything that he knows of or can understand that is important for proper completion of the proceedings.

  • A creditor cannot institute higher appeal against the judgement in which a debtor is admitted to debt restructuring. He can however put a matter before the Court for an interim termination (Section 350 BA), for example if new debts are incurred during the term of debt restructuring or if there are indications that the debtor is trying to disadvantage his creditors. He may also have a say during the verification meeting, or submit a complaint about the course of affairs to the supervisory judge. It is also possible that creditors can go into higher appeal of the judgement in which the debtor is provided with a clean sheet on expiry of the debt restructuring term (Section 355 BA). The creditor has to respect a clean sheet judgement, even if he was not involved in the debt restructuring proceedings (Section 358 BA).

4. What are the consequences of starting the proceedings?

The estate incorporates all of the debtor’s property at the time of the judgement that admits him to the arrangement, as well as all property that he obtains during the bankruptcy or application of debt restructuring according to Sections 20 and 295 BA. The possessions that are not excessive remain outside of the estate – together with other goods described in Section 21 and in paragraph 4 of Section 295 BA.

The fixation principle applies to both bankruptcy and to debt restructuring. The occurrence of bankruptcy or debt restructuring means that the legal position of everything involved in the estate becomes fixed.


Due to the judgement in which the debtor is admitted to the bankruptcy or debt restructuring arrangement he lawfully loses authority to have his goods at his disposal: from that time onward these goods belong to the estate that is managed by the administrator or receiver. He also loses the authority to conduct and to allow actual transactions in respect of these goods. He is obliged to surrender all goods that belong to the estate on the request of the administrator or receiver. The debtor must obtain permission from his administrator or receiver for some legal transactions, such as entry into a credit transaction.

No obligation exists for the creditors to submit all claims to the receiver or administrator. Anyone wishing to share in the income, which is paid out via what is referred to as a distribution list to known creditors, would be best to submit his claim.

If a clean sheet (“remission of debts”) is provided to the debtor on completion of debt restructuring, it applies to all creditors, even to individuals who have not submitted their claim to the receiver. There is an important restriction here: the debt restructuring arrangement only works in respect of claims that exist at the time of the pronouncement in which the debtor is admitted to the arrangement (Section 299 BA, the fixation principle). Claims arising after the date of the admission judgement are new debts, do not therefore fall under the debt restructuring and the discharge also cannot involve them.

In bankruptcy the supervisory judge may specify at the request of each interested party that a third party recovery competence may not be exercised for a maximum of one month, to be extended by a maximum of one month: the so-called cooling-off period. The administrator can form a picture of the estate. This cooling off order can therefore also involve the mortgage holder or pledge holder, or the individual with an ownership proviso.


There may be provisional admission to the debt restructuring arrangement in anticipation of a final judicial judgement. This legal facility is seldom used by the Court and only in acute emergency situations such as a threatened house eviction.

As soon as debt restructuring is provisionally or finally declared applicable, an overall moratorium applies against creditors as far as legal exercise is concerned. Attachments already made will lapse and executions already started will be suspended. Legal or contractual interest likewise stops from that time onwards. In debt restructuring the supervisory judge may also specify a cooling off period by order at the request of each interested party.

Registration of all current insolvency proceedings takes place in the Central Insolvency Register (CIR) at the Court for Jurisprudence in The Hague; this may be consulted via

5. What special rules apply to certain types of claims?

  • Goods delivered under ownership proviso do not fall into the state of bankruptcy or restructuring, see Sections 20 and 295 BA, but may well be affected by any judicial order in which a cooling off period is proclaimed, see below.
  • The supervisory judge in bankruptcy may at the request of each interested party specify by order a cooling off period that applies to each third party competence to recover goods belonging to the estate.
  • In principle enterprises that are not operated in the form of a corporate body may also be admitted to the debt restructuring arrangement. In principle also such an enterprise will always be liquidated in debt restructuring in accordance with judicial policy. Continuation of the profession or business as defined in Section 311 BA will not therefore occur quickly in debt restructuring. Considering the risk of an excess in estate debts, the administrator of receiver will cancel any current contracts of employment in the debtor’s business as standard.
  • See the answer to question 2 for the rights of creditors.
  • The mutual ranking order of preference (preferential right) of creditors in respect of competing creditors is different in the debt restructuring arrangement than in bankruptcy; this is a ratio of 2:1 in accordance with Section 349 paragraph 2 BA. In bankruptcy the preferential creditor is therefore better off. A more specific distribution in ranking order within the categories of preferential or competing creditors as in bankruptcy does not exist in the framework of the debt restructuring arrangement.

In principle the debt restructuring arrangement does not work in respect of claims covered by pledge or mortgage; even in bankruptcy the pledge or mortgage holder can conduct himself as if there was no bankruptcy (for bankruptcy see Sections 57, 58 and 59 BA, which apply correspondingly in debt restructuring).


6. What rules are applied to transactions that are detrimental to the estate?

If before the bankruptcy or debt restructuring the debtor conducted voluntary legal transactions that he knew or should have known would disadvantage the creditors, the administrator or receiver can call on the ‘actio pauliana’, and can reverse these transactions to benefit the estate: Sections 42 and 43 BA.

A debtor (but also a creditor or the receiver) can place the debt restructuring matter before the Court for interim termination. The conditions are described in Section 350 BA. The most frequent causes are interim termination on the grounds that excessive new debts have arisen, or that the debtor is attempting to disadvantage his creditors or is informing his receiver incorrectly or incompletely. The legal consequence is that in that case the debtor is immediately placed in a state of bankruptcy afterwards.

The law does not specify the term of a bankruptcy. Most bankruptcies are completed within eighteen months, generally with a lack of revenue and based on the simplified proceedings without verification. Complicated major bankruptcies often take longer. The supervisory judge monitors the progress made by the administrator, so that completion remains within the reasonable period required by the EVRM.

As a rule debt restructuring takes three years. In exceptional cases this period can be longer, but never longer than five years. In exceptional cases the debt restructuring period can also be shorter, up to a minimum of one year, if the Court saw no reason to hold a verification meeting. These latter proceedings are also referred to as simplified debt restructuring and are reserved for those cases in which it is established that near enough nothing will be regained from their claim.


7. What are the conditions for submitting and verifying debt claims?

  • The clerk to the Court publishes a pronouncement for opening bankruptcy or debt restructuring proceedings in the State Gazette, quoting the name of the administrator or receiver, the debtor and the supervisory judge, as well as the time when any verification meeting will be held.
  • A number of key items of information are maintained in a public register for each current bankruptcy, moratorium or debt restructuring proceedings. This register (Central Insolvency Register and National Register for Debt Restructuring) may be consulted for bankruptcies via or for debt restructuring at the Legal Aid Board in Den Bosch via Nederlands.
  • A verification meeting is not always held in the bankruptcy or debt restructuring proceedings. The Court judges whether following such proceedings is worthwhile in view of the situation of the estate – generally at the request of the administrator or receiver – or whether simplified completion can be followed. See the answer to question 5 for further details.
  • If a verification meeting is planned, the administrator or receiver communicates this to all known creditors. Creditors may submit their claims along with the associated evidence to him. The verification of all claims progresses as is the case in bankruptcy in accordance with Sections 110 to and including 116 BA. Creditors with a claim, the existence and size of which are recognised, are placed on a list of recognised claims.
  • In the debt restructuring arrangement a distinction only exists between preferential and competing claims. There is no ranking order within these two categories, as is the case in bankruptcy (Section 349 paragraph 2 BA).

8. What directives apply to the reorganisation and restructuring?

It is possible to restart an enterprise in the framework of bankruptcy proceedings. The administrator will cancel the contracts of employment (Section 40 BA) since the occurrence of estate debts must be limited as much as possible and because – contrary to moratorium – the customary dismissal protection does not apply during the transition of the enterprise into bankruptcy. The administrator may continue the business of the bankrupt party provided that this is in the interest of the estate.


The intention of the moratorium proceedings is to reorganise enterprises. The term is a maximum of eighteen months with a facility for extension. The debtor requires authorisation from his receiver for acts of management or disposal. The debtor cannot be forced to pay his debts during the moratorium. Any attachments made on non-preferential claims lapse. The moratorium does not in fact work in respect of preferential claims.

The essence of the debt restructuring arrangement is a complete restructuring of the debtor’s existing debt burden where he is a natural person. The judicial admission judgement implies putting a stop to creditors exercising the law. Attachments already imposed lapse and executions already started are suspended (Section 301 BA). Legal or contractual interest also stops running from that time (Section 303 BA). If a debtor properly goes through the three-year phase, and pays off a maximum on his debts, the remaining debts may be converted by legal judgement into natural commitments (Section 358 BA). This means that these remaining debts may no longer be collected for a creditor.

In bankruptcy the administrator directs the reorganisation and restart. In a moratorium the debtor and receiver do this jointly. The term of bankruptcy is not specified but the term of a moratorium is eighteen months in principle. Reorganisations in bankruptcy generally have more chance of success since the legal dismissal protection does not apply, whereas it does in moratorium. The Court approves the restructuring plan in all cases.

The term for debt restructuring is three years and this is established in the restructuring plan (Section 343 BA). The Court establishes this based on a model, in theory using a draft from the side of the debtor, and this contains the obligations that the debtor must adhere to. In practice most cases of debt restructuring progress without such a plan, because the proceedings are experienced as laborious. The law will also be changed soon on this point (Bill 29 942), so that the restructuring plan will no longer be part of the proceedings.


9. What directives apply to the liquidation?

Both the bankruptcy proceedings and the debt restructuring proceedings focus on liquidation of the available equity. This is contrary to the moratorium, which is precisely focused on retention of the assets, and in principle is intended to bridge the enterprise’s temporary payment problems.

In bankruptcy the administrator can impose a reasonable term on the pledge or mortgage holder for progress to exercising their rights.

In bankruptcy the main rule is public sale, unless the supervisory judge allows private sale (Section 176 BA). The administrator is authorised to progress to liquidation (Section 68 BA). On the contrary in debt restructuring the receiver in principle always needs authority from the supervisory judge to progress to liquidation, but as a rule a public sale is once again unnecessary. Liquidation of the available assets may also take place in the form of a bankruptcy or debt restructuring agreement.

As a rule the administrator or receiver only distributes once to the creditors, this being at the end of the proceedings. The debt restructuring and bankruptcy formally end when the final distribution list becomes binding. The administrator or receiver informs creditors of this. Creditors may object to (oppose) this list.

Simplified proceedings exist in both bankruptcy and debt restructuring. These are proceedings without a verification meeting. In bankruptcy it is required that there is insufficient income to satisfy the competing claims.

10. What are the conditions for termination of the proceedings?

The essential difference between bankruptcy and debt restructuring is that after completion of a bankruptcy the claims not paid survive and can therefore become collectable again for creditors (Section 195 BA). This happens at the time when the final distribution list becomes binding, in other words when opposition against this by a creditor is no longer possible. A bankruptcy ends by means of an agreement, or by means of a simplified completion (removal in the case of a lack of income) or by means of a distribution to the creditors following verification of their claims.


Moratorium proceedings end either through withdrawal at the debtor’s request or by means of an agreement that the Court approves.

Debt restructuring is completed positively or negatively:

  • If a debtor keeps properly to his debt restructuring obligations (fully informing the receiver, getting as much money into the estate as possible for three years, going to work or as the case may be staying at work) the Court will grant him a “clean sheet” in the final judgement. This implies (see Section 358 of the Bankruptcy Act) that the remaining debts may no longer be legally collected for creditors.
  • If a debtor does not adhere to his debt restructuring obligations, debt restructuring may be terminated in the interim with no clean sheet. Now the debtor will be lawfully in a state of bankruptcy (see Section 350 of the Bankruptcy Act). For example, this can happen if the debtor allows excessive new debts to arise during the term of his debt restructuring, or if he tries to disadvantage his creditors.

The circumstance that someone has been bankrupt or has been involved in moratorium or debt restructuring, remains registered for some time with the Bureau for Credit Registration (BCR) in Tiel and with the Central Insolvency Register (CIR) at the Board for Jurisprudence in The Hague ( This is after all a relevant risk factor for credit providers. There are no legal obstacles to restarting an enterprise. Following successful restructuring proceedings there are again prospects for a good financial future for private individuals since the debt burden has been discharged.

An entrepreneur who has significantly contributed to the bankruptcy through apparently improper administration of the enterprise may be held liable by the administrator on the grounds of the Civil Code. The Penal Law Code contains provisions concerning threatened bank breaking. No specific sanctions exist for employers/non-corporate bodies if they do not adhere to their debt restructuring obligations.

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Last update: 06-07-2007

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