A Dutch company that expects it will no longer be able to pay its debts as they fall due can ask the court for surseance van betaling: a suspension of payments. The idea is straightforward. The company gains breathing space, creditors wait, and the time is used to put the business back in order.
In practice the instrument is weaker than it sounds, and the reason is one that most explanations leave out: a suspension of payments does not work against every creditor. A foreign parent company that assumes it has bought a general standstill for its Dutch subsidiary will find that the parties applying the most pressure simply carry on.
How a suspension of payments works
Suspension of payments is governed by Title II of the Dutch Bankruptcy Act (Faillissementswet, Fw). Under article 214 Fw the debtor may apply when it foresees that it will be unable to continue paying its due debts. Three features of that wording matter.
The company applies itself. A creditor cannot force a suspension of payments on a debtor; a creditor can only petition for bankruptcy. The instrument is meant for businesses, not for private individuals, who fall under the debt restructuring scheme for natural persons. And a Dutch lawyer is required, because the application takes the form of a petition to the court, supported by a statement of assets and liabilities.
If the petition is complete the court will almost always grant a provisional suspension immediately, appointing an administrator (bewindvoerder) and a supervisory judge (rechter-commissaris). From that moment the company’s management can no longer act alone: administering and disposing of assets requires the administrator’s cooperation.
A creditors’ meeting follows within a few months, at which the definitive suspension is put to a vote. Under article 218 Fw the court must refuse it if creditors representing more than one quarter of the amount of claims represented at the meeting vote against, or if more than one third of the number of voting creditors vote against, or if there is well-founded fear that creditors will be prejudiced or no realistic prospect that they will eventually be paid. Those voting thresholds apply to ordinary unsecured creditors only.
Where a definitive suspension is granted, the court sets its duration at no more than eighteen months. The company may request extension before it expires, each time for no more than a further eighteen months.
Which creditors are bound, and which are not
This is the heart of the matter. A suspension of payments operates mainly against ordinary unsecured creditors: those without priority and without a special right of recourse. Payment of pre-suspension debts to those creditors may then only be made to all of them jointly and in proportion to their claims (article 233 Fw).
The position of other creditors is materially different.
- Preferential creditors, notably the Dutch tax authorities and the employee insurance agency UWV, are not bound in the same way as ordinary creditors (article 232 Fw). What they can actually do during the suspension depends on the nature of the claim, on any attachments already levied, and on whether a cooling-off period has been ordered.
- Secured creditors holding a right of pledge or mortgage may in principle enforce their security as if no suspension existed (article 232 Fw). They need not wait for a composition with the ordinary creditors, unless a cooling-off period temporarily restricts them.
- Retention of title is not a security right in this sense. A supplier who has validly agreed retention of title may reclaim the goods delivered, provided the clause was properly agreed and the goods can be sufficiently identified.
Statements to the effect that the tax authorities and UWV can simply “carry on collecting and levying attachment”, or that all bank claims can be “enforced immediately”, are too absolute. The precise position depends on the nature of the right, on any cooling-off period, and on the special rules that apply.
For many companies the acute pressure sits precisely with the tax authorities and the bank. Where that is so, a suspension of payments will not solve the problem.
The cooling-off period
At the request of an interested party or of its own motion, the court or the supervisory judge may order a cooling-off period of up to two months, extendable once by a further two months (article 241a Fw). During that period third parties, including secured and preferential creditors, cannot exercise their rights of recourse against assets of the estate without the supervisory judge’s authorisation. Creditors of the estate itself are not affected.
The cooling-off period is intended to give the administrator time to examine the position of the business and its assets. It is not a substitute for a solution, and a company that needs one in order to survive must be ready within those four months.
Staff, lease and suppliers
A suspension of payments does not release the company from new obligations.
- Wages: from the start of the suspension, wages and the related social security contributions are debts of the estate (article 239(3) Fw) and must be paid in priority.
- Terminating employment contracts: with the administrator’s cooperation the company may terminate employment contracts observing the agreed or statutory notice period, on the understanding that six weeks will in any event suffice, except where the statutory period under article 7:672(2) of the Dutch Civil Code exceeds six weeks, in which case that longer period applies (article 239 Fw). Article 239 Fw governs the length of the notice period only. Whether UWV permission or a court application is also required follows from ordinary dismissal law; unlike in bankruptcy, there is no general statutory exception for suspension of payments (compare article 7:666 of the Civil Code).
- The wage guarantee scheme operated by UWV also applies during a suspension of payments (article 61 of the Unemployment Insurance Act). However, wages over the notice period are reimbursed only up to the period applicable under article 40 Fw, expressly “both in and outside bankruptcy” (article 64(1)(b)). Because a suspension of payments may attract the longer statutory notice period, part of the wages owed can fall outside that reimbursement and be borne by the estate.
- Lease: from the start of the suspension the rent is a debt of the estate (article 238 Fw). The debtor may terminate the lease early against a customary date, with three months’ notice always sufficing. Only the debtor as tenant may use this special right of termination; unlike in bankruptcy, the landlord may not.
- Other running costs and new supplies: energy, insurance and other current liabilities must be paid on time, but the fact that an obligation arises during the suspension does not automatically make it a debt of the estate. New suppliers are well advised to agree payment terms, retention of title, credit limits and suspension rights in writing before delivering.
Suspension of payments or the WHOA?
A suspension of payments suits a genuinely temporary liquidity problem where the business can generate enough income in the short term to meet its obligations. Since the Dutch Act on Court Confirmation of Extrajudicial Restructuring Plans (WHOA) came into force on 1 January 2021, the suspension has moved into the background for genuine restructurings.
The difference is decisive. Under a suspension you need your creditors’ agreement, and the tax authorities and secured creditors sit outside it. Under the WHOA a plan can be imposed on dissenting creditors, and those same parties can be brought within it. The tax position deserves separate attention: the Dutch tax authorities assess any composition offered against their own policy criteria before voting.
The choice between the two depends on the cause and expected duration of the liquidity problem, the size of current obligations, the balance between ordinary, preferential and secured debt, the funding available during the procedure, the feasibility of a composition, and whether the business is viable after restructuring.
If the suspension ends in bankruptcy and a restart comes into view, the position of the workforce changes fundamentally: the bankruptcy exception in article 7:666 of the Civil Code applies in bankruptcy and not during a suspension of payments. What that means for the transaction is set out in Restarting a business out of a Dutch bankruptcy, and what it means for employees in Your Dutch employer is bankrupt.
What a suspension of payments costs
The costs consist of court fees, legal fees and the administrator’s remuneration. That remuneration is fixed by the court and ranks as a debt of the estate, ahead of the ordinary creditors. Where liquidity is limited, it must therefore be established in advance whether there are sufficient means to continue the business during the procedure.
Before applying you should at least have a view of the liquidity requirement during the procedure, expected income and expenditure, the willingness of key funders and suppliers to cooperate, the position of the tax authorities and other preferential creditors, and whether a composition or WHOA process can be financed. An application without a realistic liquidity forecast can weaken the company’s position rather than relieve it. Our hourly rates are set out on lawyer fees in the Netherlands.
If your customer applies for a suspension of payments
Establish first whether your claim is ordinary, preferential or secured, and whether it arose before or after the suspension. That classification largely determines your rights of recourse and your voting rights.
- With security (pledge, mortgage): you retain your position in principle, unless a cooling-off period temporarily restricts you.
- With retention of title: you may reclaim the goods under the applicable conditions, provided the clause was validly agreed and the goods are sufficiently identifiable.
- Without security: you cannot enforce individually. File your claim with the administrator in good time and vote at the creditors’ meeting.
- On new supplies during the suspension: agree payment, credit limits, retention of title and the right to suspend further deliveries in writing beforehand. This limits the risk but offers no absolute certainty.
In closing
A suspension of payments is neither a general ban on collection nor an automatic lifeline. It can be effective where a liquidity problem is temporary and there is a genuine prospect of recovery. It is less suitable where the business is structurally loss-making, or where the largest creditors are secured or preferential.
Are you considering applying for a suspension of payments, or are you facing the suspension of a Dutch customer? Our insolvency lawyers will assess your position and determine with you whether a suspension, the WHOA or an alternative arrangement offers the best prospect. See our page on bankruptcy and insolvency.
This article gives a general overview of Dutch law as it stands on 24 August 2026 and is not legal advice for a specific situation.
