Insolvency proceedings

6.1. General information


A debtor can be declared bankrupt at their own request or at the request of just one of their creditors, provided that evidence is supplied to the court that more than one debt is left unpaid by the debtor.

Insolvency proceedings – whether regular insolvency, insolvency plan, or individual insolvency – are a kind of collective enforcement by all the creditors against the debtor.

With a verdict of the court, the bankruptcy is established with the result that all the proceedings and enforcement (also the preservative kind) will be suspended.

The aim of insolvency proceedings is to pay out all the creditors with the same percentages of their debts by liquidating the assets of the debtor company, or by collecting the enforceable income of the individual who is declared bankrupt.

Besides bankruptcy, there are two other types of insolvency:

Suspension of payment

A company or a natural person who is temporarily in a position where they are not able to pay their debts might file a petition for suspension of payment.

The court often allows provisional suspension for a certain period (from two to six months), after which the debtor has to submit all the records on their financial situation, as well as a plan towards the future, and how they will meet the obligations to the creditors.

Law-enforced composition with creditors for a natural person’s debts (WSNP)

This insolvency procedure is related to natural persons (owners of small shops, farmers, and the likes) who are personally liable for debts. Dutch law provides such a debtor with the possibility to request the court that they be allowed to enter a WSNP.

By fulfilling certain obligations in good faith, such a debtor is allowed by the court to enter a WSNP. The court will appoint an official receiver who is monitored by a member of the court.

On 1 January 2021, the Homologation Private Agreement (“Wet Homologatie Onderhands Akkoord” or WHOA) came into force. The WHOA is introducing a regulation in the Netherlands that results in what is also referred to as a “compulsory agreement”. The proposed arrangement provides for the possibility to have a private agreement between a company and its creditors and shareholders on the restructuring recognised and approved by the court (homologated). Court approval ensures that all the involved creditors and shareholders are attached to the content, also those voted against the content of the agreement. They can therefore still be held to the content if the agreement meets the requirements. The scheme is embedded in the current Bankruptcy Act.

6.2. Proceedings


The court declaring the debtor bankrupt will appoint an official receiver as well as a member of the court who will monitor the official receiver. The official receiver will act on behalf of the creditors and can implement several (business) actions, with the approval of the member of the court, to liquidate the assets in favour of the creditors.

All the creditors must lodge their claims with the official receiver and take back any goods delivered under ROT. For goods in stock, the official receiver can choose either to pay the original prices to the creditors or to return the goods. In the case the goods are returned, there might be a request to pay an insolvency contribution, varying from 4% to 9% of the invoiced value. This contribution has been sanctioned in jurisprudence but has to be deemed reasonable.

There are no specific deadlines for lodging claims, but it’s advised that the creditors do so as soon as possible to prevent the goods delivered under ROT clauses from being liquidated.

All the claims lodged are checked by the official receiver and, if agreed, are placed on a list of recognised creditors. The official receiver may dispute a claim and a specific procedure might follow, but this depends on whether there are any dividends for the creditors to be expected.

At the end of the proceedings, the official receiver will inform the court about the settlement or end of the bankruptcy. Most insolvencies are ended without any dividends for the non-privileged creditors. If there are any dividends available, they will usually be small percentages of the debts, varying from 1% to 20% of the original claims.

Suspension of payment

Like in bankruptcy, the creditors have to lodge their claims with the official receiver. If it's judged that there is a possibility of achieving a positive outcome in the future, including a payment plan for the debts, the suspension will become definitive.

It’s also possible to come to an agreement with the creditors. The agreement has to be approved by the court and the majority of the creditors regarding each debt. With the payment plan or composition approved by the court, the suspension will end. However, often suspension becomes bankruptcy.

Law-enforced composition with creditors for a natural person’s debts (WSNP)

The creditors have to lodge their claims as described above. The official receiver has to determine in which capacity the debtor has to pay in instalments over a period of three years.

After this period and provided that the debtor meets their obligations as agreed with the official receiver, the total reserved amount will be divided among the creditors in a full and final settlement.

It should be noted that if a natural person has been declared bankrupt, it often comes – at the request of the debtor – to transfer to a WSNP. Most of the time, the creditors will receive only a small percentage of their debts (varying from 1% to 10%).

6.3. Required documents

In order to lodge a claim on your behalf, we do not need an official or original power of attorney, but we need the following:

  • Copies of the invoices
  • Copies of the contracts
  • The order confirmations and delivery notes
  • Copies of the general conditions of sale

6.4. Expected time frame

In the Netherlands, there are no specific deadlines for lodging claims, but it’s advised to act as soon as possible on the acknowledgement of any insolvency.

Bankruptcy proceedings normally last between one and five years, depending on the size of the insolvent company and the quantity of the assets to be liquidated.

The duration of suspension of payment also depends on several factors, such as the economic outlook, and usually lasts between two and 24 months.

The total time frame for a law-enforced composition with creditors for a natural person’s debts is normally three years.

6.5. Limited companies

The main reason for filing a petition for bankruptcy at the debtor’s request or at the request of one of the creditors is the debtor’s inability to pay, which is supposed to be the case when at least two debts (of a reasonable amount) remain unpaid.

Filing a petition for bankruptcy at the request of a creditor is normally an efficient action to get payment.

6.6. Unlimited companies / individuals

For unlimited companies with personally liable partners or individual debtors, it isn't common for them to request bankruptcy themselves. Filing a petition for bankruptcy against such a debtor at the request of a creditor is merely used as an efficient collections tool.

6.7. Pools of creditors

In the Netherlands, there is no legislation on pools of creditors. In practice, however, such pools exist on a voluntary basis, especially when a bigger company goes bankrupt.

A pool of creditors is mainly founded by credit insurance companies and/or the largest creditors, with the aim of accumulating all the claims of the creditors who delivered goods under ROT clauses, and instructing the official receiver to take appropriate legal action against the debtor company’s managing directors if there are grounds for mismanagement.

6.8. Rescission

The official receiver can dispute any juridical acts carried out by the debtor one year before the date of their insolvency on a voluntary basis, and based on which the debtor knew or had to know that this would damage the positions of their creditors. It’s assumed that the debtor had this knowledge if the legal acts were executed one year before the date of their insolvency. If the liquidator disputes these legal acts, which include payments, those creditors have to indemnify the official receiver or refund the payments. The creditors can only lodge the corresponding claims or debts instead.

If a creditor receives payment the moment they know that a petition for bankruptcy was already filed against the debtor, the creditor is obliged to refund the monies at the request of the liquidator.

(End of chapter 6 - Insolvency proceedings)

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