Article 1 of the Dutch Bankruptcy Act (Faillissementswet) is the starting point of Dutch bankruptcy law. A debtor that is in a state of having ceased to pay its debts (opgehouden te betalen) can be declared bankrupt by court judgment, on its own filing, at the request of one or more creditors, or at the request of the public prosecutor for reasons of public interest.
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Who can file for bankruptcy?
Three parties. The debtor itself can file its own petition (eigen aangifte). One or more creditors can file a petition, through a lawyer. The public prosecutor (Openbaar Ministerie) can request bankruptcy for reasons of public interest, for example in cases of fraud. The petition is filed at the district court of the debtor’s place of residence or registered office (Article 2 Bankruptcy Act).
What is the test for bankruptcy?
The factual payment situation, not the size of the debt. A debtor has ceased paying when it no longer pays its due debts. In practice, the court requires at least two creditors, of which at least one has a claim that is due and unpaid. A single unpaid invoice is therefore not enough, which leaves room for a defence. The court assesses this summarily (Article 6 Bankruptcy Act).
When should a company file its own bankruptcy?
When continuing the business offers no realistic prospect and payment obligations cannot be met. For a private limited company (BV), the board may only file for its own bankruptcy on the instructions of the general meeting, unless the articles of association provide otherwise (Article 2:246 Dutch Civil Code). Timing matters: continuing too long, or making selective payments, can lead to personal liability of directors.
What should creditors consider?
A bankruptcy petition is a heavy but effective tool when ordinary debt collection fails. It is only suitable for claims that cannot seriously be disputed. Consider in advance whether anything will be left for unsecured creditors after the bankruptcy, since a bankruptcy is rarely reversed once declared.
Frequently asked questions
Can private individuals be declared bankrupt?
Yes. Article 1 applies to natural persons and legal entities, although individuals often use the debt rescheduling scheme (WSNP) instead.
Do I need a lawyer to file?
Yes, a creditor’s petition must be filed by a lawyer.
Related terms
- Article 6 Dutch Bankruptcy Act (bankruptcy order)
- Bankruptcy
- Article 369 Dutch Bankruptcy Act (WHOA restructuring plan)
- Article 2:248 Dutch Civil Code (director liability in bankruptcy)
Our corporate lawyers advise companies and creditors on filing for bankruptcy and on the alternatives. Want to know what this means for your situation? Book a free introductory meeting.
