Dutch insolvency law: key questions for businesses and creditors

Dutch insolvency law is set out in the Bankruptcy Act (Faillissementswet) and offers four routes. Bankruptcy (faillissement) winds up the estate under a court-appointed curator; suspension of payments (surseance van betaling) gives a business temporary protection against unsecured creditors only. The WHOA (Wet homologatie onderhands akkoord) lets a company have a restructuring plan confirmed by the court, even against creditors who vote against it. The Wsnp (Wet schuldsanering natuurlijke personen) gives a private individual a clean slate after a court-supervised period that, since 1 July 2023, lasts eighteen months as a rule.

Below, we answer the questions that entrepreneurs, directors and creditors typically face when a business runs into payment problems. For each question you will find what the statute requires, which deadlines are strict, and where the practical risk lies. Where a topic is covered in more depth elsewhere on this site, we link to that article instead of repeating it.

What does Dutch insolvency law cover, and who is it for?

The Bankruptcy Act deals with a debtor who can no longer pay by turning the problem into a collective one. Once a procedure opens, individual creditors can no longer enforce on their own and are paid according to a statutory order of priority.

That is the purpose of the system. Without it, the fastest and best-informed creditor would take the assets, and the others would receive nothing.

Three of the four procedures are open to businesses. Bankruptcy applies to both companies and individuals. Suspension of payments is available to any debtor except a natural person who does not carry on a business or independent profession. The WHOA is designed for businesses with a viable core but an unsustainable level of debt. Only the Wsnp is reserved for private individuals, including former sole traders who have stopped trading.

Choosing between them is a commercial decision as much as a legal one, and timing matters. Your realistic options narrow quickly once payments have stopped, once a lender has enforced its security, or once a creditor has filed a petition. Our introduction to insolvency and restructuring in the Netherlands describes the same landscape from a strategic angle.

When will a Dutch court declare a company bankrupt?

A court declares a debtor bankrupt when it appears, on a summary review, that the debtor has stopped paying. That requires more than one unpaid creditor; a single disputed invoice is not enough.

Article 1 of the Bankruptcy Act sets the test. Settled case law adds the requirement of plurality: the petitioning creditor must show at least one other claim that is also unpaid, the so-called supporting claim (steunvordering). Being loss-making does not meet the test either. What counts is whether payments have actually stopped.

A petition can be filed by the debtor itself, by a creditor, or by the Public Prosecution Service (Openbaar Ministerie) on grounds of public interest. It goes to the district court (rechtbank) where the debtor is established. The hearing usually follows within a few weeks and is short. The court does not rule on the underlying claim itself, only on whether the statutory test is met. If the debtor pays or reaches an arrangement before the hearing, the petition is normally withdrawn.

If the court grants the petition, it appoints a curator and a supervisory judge (rechter-commissaris) in the same judgment. The bankruptcy is published in the Central Insolvency Register (Centraal Insolventieregister) and in the trade register. From that moment, the debtor can no longer dispose of the estate. The official government guidance on bankruptcy summarises the practical consequences.

How long do you have to challenge a bankruptcy order?

Very little time: eight days to appeal, or fourteen days to lodge opposition if you were not heard. Both periods run from the date of the judgment, not from the day you hear about it.

A party that appeared at the hearing can appeal within eight days under article 8 of the Bankruptcy Act. A party that did not appear, typically a debtor declared bankrupt in its absence, can lodge opposition (verzet) within fourteen days under article 10. Both steps require a lawyer. If you miss the deadline, the bankruptcy stands.

What does the curator do, and who supervises the curator?

The curator administers and sells the estate for the benefit of all creditors together, under the supervision of the supervisory judge. The curator acts for neither the debtor nor any individual creditor.

The curator is an independent insolvency practitioner, in practice nearly always a lawyer, appointed by the court. That independence is often misunderstood. It is also why a cooperative debtor usually fares better than an obstructive one: the curator has statutory powers to demand information, and refusing to cooperate can itself lead to personal consequences.

Day to day, the curator secures the assets and examines the books. The curator also decides whether continuing the business will yield more than an immediate sale, verifies the claims submitted, and reports periodically to the supervisory judge. Major decisions, such as selling assets, continuing the business and dismissing staff, need the supervisory judge’s authorisation.

In what order are creditors paid?

Distribution follows a fixed order. Estate debts, incurred by the curator after the bankruptcy date, are paid first.

Preferential claims come next, notably those of the tax authorities (Belastingdienst) and the employee insurance agency (UWV). Ordinary unsecured creditors share whatever is left, which is often little or nothing. Holders of a right of pledge or a mortgage stand outside that queue altogether. Under article 57 of the Bankruptcy Act they can enforce as if there were no bankruptcy. That is why security obtained before trouble began is worth far more than any argument made afterwards. If you are dealing with a customer in difficulty, our guide to a contract partner’s bankruptcy sets out the practical steps.

What does a suspension of payments actually achieve?

A suspension of payments buys time against ordinary unsecured creditors, and nothing more. Secured and preferential creditors are not bound by it.

Under article 214 of the Bankruptcy Act, a debtor who expects to be unable to keep paying its debts may ask the court for a suspension. The court grants a provisional suspension almost immediately and appoints an administrator (bewindvoerder). From then on, the debtor needs the administrator’s consent for its acts. A definitive suspension follows only if the creditors do not oppose it in sufficient numbers. It is granted for a maximum of eighteen months, which the court can extend.

The limitation is decisive, and it explains why many suspensions fail. Secured creditors can still enforce their pledge or mortgage. Preferential creditors are not bound either, so tax claims and wage claims keep running. If your business depends on bank finance secured on its receivables and stock, a suspension will not stop the bank. Where a suspension cannot realistically lead to a composition with creditors (akkoord), the court converts it into a bankruptcy.

Our article on suspension of payments in the Netherlands explains when the procedure is worth attempting, and the government guidance on suspension of payment covers the filing formalities.

Used well, the suspension is a bridge to something else: a sale of the business, a composition with unsecured creditors, or a WHOA plan. It is not a restructuring in itself. Entering one without a clear exit plan usually wastes the only period of protection the business will get.

How does a WHOA restructuring plan work?

The WHOA lets a company with a viable core offer a restructuring plan to its creditors and shareholders, and have the court confirm it even if some of them vote against. It has applied since 1 January 2021 and is set out in articles 369 and following of the Bankruptcy Act.

The plan is meant for a company that is heading towards insolvency but can survive if its debts are reduced or restructured. There is no curator: the company keeps control of its business throughout.

How are the votes counted?

Creditors and shareholders are divided into classes according to their rank and rights, and each class votes separately. A class accepts the plan if creditors representing at least two-thirds of the total amount of the claims of those who actually voted in that class are in favour.

If at least one class that could expect a payment in a liquidation (a class “in the money”) accepts, the court can confirm the plan against the other classes. There are safeguards. No creditor may end up worse off than in a liquidation, and value must be distributed according to rank unless there is a good reason to depart from it.

What protection does the company get during the process?

The court can order a cooling-off period (afkoelingsperiode) of up to four months, extendable to a maximum of eight months in total. During that period creditors cannot enforce, and pending bankruptcy petitions are put on hold.

Contracts can be amended or terminated with the court’s permission. Employment contracts, however, are expressly excluded from the plan. Our explanation of the WHOA scheme goes through the class composition in detail, and the government summary of the WHOA gives the outline.

The practical constraint is preparation. A plan stands or falls on a defensible valuation showing what creditors would receive in a liquidation, and on a class composition that survives challenge. Companies that start when their cash has already run out rarely have time to build either.

What happens to employees when the employer goes bankrupt?

Employment does not end automatically on the bankruptcy order. The curator can terminate employment contracts with the supervisory judge’s authorisation, with a notice period of at most six weeks.

That maximum follows from article 40 of the Bankruptcy Act. The ordinary dismissal protections do not apply in this situation, including the requirement of a permit from the UWV or a decision of the subdistrict court (kantonrechter).

Unpaid wages and holiday pay are taken over by the UWV under the wage guarantee scheme (loongarantieregeling). It covers a limited period of arrears before the end of employment, the wages over the notice period and outstanding holiday allowance, all within statutory limits. It does not cover everything. There is no right to a transition payment (transitievergoeding) in a bankruptcy, and the wage guarantee scheme does not fill that gap. If you are an employee, our article on what happens when your Dutch employer is bankrupt sets out your position.

What if the business is sold out of the bankruptcy?

Where the business, or a viable part of it, is sold out of the bankruptcy, the ordinary rules on transfer of undertaking (overgang van onderneming) do not apply in full. That is why a sale out of bankruptcy is attractive to buyers and painful for staff.

The advantage has limits. A sale prepared in advance that is in substance an ordinary transfer can be treated as one. The risks on both sides are explained in our article on restarting a business out of a Dutch bankruptcy.

When are directors personally liable?

Directors are not automatically liable for the company’s debts; liability requires fault. The main route in a bankruptcy is article 2:248 of the Dutch Civil Code (Burgerlijk Wetboek).

Under that article, the curator can hold the board liable for the deficit in the estate if the board clearly performed its duties improperly and this was an important cause of the bankruptcy. Only conduct in the three years before the bankruptcy counts. The assumption that directors are always liable causes a great deal of unnecessary worry.

The provision has force because of its presumptions. If the company did not keep proper books, or filed its annual accounts late, the board is deemed to have performed its duties improperly. That improper performance is then presumed to be an important cause of the bankruptcy. The board can rebut the second presumption by showing another cause, but the first is very hard to escape. In practice, claims against directors often start from a bookkeeping or filing failure rather than from a poor commercial decision.

Are there other grounds for liability?

Yes. Article 2:9 of the Civil Code governs liability towards the company itself for improper performance of duties.

Under the general law of tort (onrechtmatige daad), a director who enters into an obligation on the company’s behalf, knowing that the company will not perform and will offer no recourse, can be held personally liable by that creditor. Where the conduct goes further, for example when assets are moved out of reach before the filing, the matter can become criminal; see our article on bankruptcy fraud. The practical thresholds are worked out in our guide to directors’ liability for Dutch BV directors.

The defensive lesson is simple but effective. Keep the books in order, file the accounts on time, record the reasoning behind decisions taken under pressure, and stop taking on new obligations once it is clear they cannot be met.

Can the curator unwind transactions from before the bankruptcy?

Yes. The actio pauliana allows the curator to annul acts performed before the bankruptcy that harmed the creditors as a whole.

Article 42 of the Bankruptcy Act covers voluntary acts the debtor was not obliged to perform, such as a sale below value, a gift, or granting late security for an existing debt. The curator must show that both the debtor and the counterparty knew, or should have known, that creditors would be harmed. Article 43 presumes that knowledge for a list of suspect transactions performed within a year before the bankruptcy, including dealings with related parties. That shifts the burden of proof.

Can a payment you received be clawed back?

Only in limited cases, because paying a debt that is due is normally lawful. Article 47 allows such a payment to be annulled in two situations only.

The first is where the recipient knew that a bankruptcy petition had already been filed. The second is where the payment resulted from consultation between debtor and creditor aimed at favouring that creditor over the others. Group companies, shareholders and directors who receive payment in the final weeks are the usual targets.

If the claim succeeds, the transaction is unwound and the asset or the money returns to the estate. For counterparties, the lesson is that a payment from a business in difficulty is not necessarily yours to keep. Asking a struggling debtor for extra security can also backfire.

How long does the Wsnp last, and who qualifies?

Since 1 July 2023, the Wsnp lasts eighteen months as a rule, instead of the three years that applied before. It ends in a clean slate: debts that remain afterwards can no longer be enforced.

The Wsnp is the statutory debt restructuring scheme for private individuals. The court can extend the period if the debtor does not meet the obligations of the scheme.

Admission is not automatic. The applicant must normally first have tried to reach an out-of-court arrangement with creditors through municipal debt assistance (gemeentelijke schuldhulpverlening), and must submit a statement confirming this. Where an arrangement is clearly impossible, that attempt can be dispensed with. The court also examines whether the applicant acted in good faith in the period before the application, looking among other things at how the debts arose. The rules on this assessment, and on reapplying after an earlier scheme, were revised with the 2023 reform.

During the scheme, the debtor lives on an amount for essential costs and pays the surplus into the estate, supervised by an administrator. The obligations include making an effort to find and keep work, fully disclosing income and assets, and not taking on new debts. Failure to comply can end the scheme without a clean slate, which leaves the debtor worse off than before. If you are a creditor wondering what remains for you afterwards, our article on recovery after a Dutch Wsnp clean slate answers that in detail.

Can a company simply be dissolved instead?

Yes, if it has no assets at all. A company without assets can be dissolved by a shareholders’ resolution and then ceases to exist immediately, without a liquidation.

This is known as a turbo liquidation (turboliquidatie). The test is the absence of assets, not the absence of debts, which is why the route remains open to a company that still owes money. Transparency rules now require the board to file financial statements for the final period with the trade register, together with any annual accounts not yet filed.

A turbo liquidation is not a way to avoid scrutiny. A creditor who believes assets were present, or were removed shortly before the dissolution, can ask the court to reopen the liquidation and appoint a liquidator. The ordinary rules on directors’ liability also continue to apply. Where there is any doubt about whether assets existed, a formal liquidation or a bankruptcy filing is the safer course.

What should you do at the first sign of trouble?

Act while you still have options. Legal instruments are strongest early, when there is still cash to fund a process and assets that are unencumbered.

They are weakest late, when the only question left is who bears the loss. A director who takes advice three months before the money runs out can usually choose the route. A director who takes advice three days before usually cannot.

What should a director do?

Prepare a realistic short-term cash forecast. Establish which creditors hold security, and over which assets. Check that the annual accounts have been filed and the books are complete, and stop entering into obligations that cannot be met.

Talk to the tax authorities before arrears build up. If the company cannot pay payroll taxes or VAT, report the inability to pay (melding betalingsonmacht) within the statutory period, because failing to do so exposes directors personally.

What should a creditor do?

Act just as quickly. Submit your claim to the curator with the supporting documents.

Check whether you have retention of title (eigendomsvoorbehoud), a right of pledge or a right to suspend performance (opschortingsrecht), and consider whether payments you received in the final weeks could be challenged. Often, the strongest position is created by contract terms agreed long before any of this happens.

How can we assist you?

We advise companies, directors, self-employed professionals and creditors on Dutch insolvency law. We assess which procedure fits your situation, prepare and defend bankruptcy petitions, structure WHOA plans and suspensions of payments, act for creditors in claim verification and pauliana disputes, and defend directors against liability claims.

Where a business can be saved, we work on the sale or the plan; where it cannot, we focus on limiting personal exposure. Our insolvency lawyers can assess your position in confidence, and our guide to bankruptcy for entrepreneurs and creditors walks through the procedure step by step.

Frequently asked questions

Can one unpaid creditor have my company declared bankrupt?

Not on its own claim alone. The creditor must show that at least one other claim is also unpaid, and that you have stopped paying.

Does a suspension of payments stop my bank from enforcing?

No. Secured creditors, such as a bank with a pledge on receivables and stock, can still enforce during a suspension.

Can employees be dismissed in a WHOA plan?

Not through the plan itself. Employment contracts are expressly excluded from a WHOA plan; any dismissals follow the ordinary rules of employment law.

Am I liable as a director if my company goes bankrupt?

Not automatically. Liability under article 2:248 of the Civil Code requires clearly improper performance of your duties that was an important cause of the bankruptcy.

In summary

• Dutch law offers four routes: bankruptcy, suspension of payments, a WHOA plan and, for individuals, the Wsnp.
• Deadlines are strict: eight days to appeal a bankruptcy order, fourteen days to lodge opposition.
• A suspension of payments does not bind secured or preferential creditors; a WHOA plan can bind dissenting classes.
• Directors are liable only for fault, but poor bookkeeping or late accounts trigger strong presumptions.
• Act early: your options are widest before payments stop.

Unsure where you stand? Tell us about your situation. We will let you know your options within one working day.

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