1. When are you declared bankrupt in Belgium?
In Belgium a debtor is declared bunkrupt if he has ceased to pay his creditors and when his credit is affected.
Both conditions are necessary.
2. How long does it take to process a petition for bankruptcy?
In fact there are 3 possibilities to get bankrupt.
- The debtor submit a petition to the commercial court for bancrupty
Period between the petition and the judgement is max 7 days
- A single creditor can petition the court for bancrupty.
The procedure is initiated before the court 8 days after summons
- Special division of the court of commerce who investigates and checks companies in financial trouble can ask the public attorney to start a bancrupty procedure.
The debtor has the possibility to defend himself before the court.
3. What can you do if you disagree with the bankruptcy order by the court?
First of all when there is a petition by a creditor or public attorney the debtor you can defend himself in court.
Judgements of the commercial court can be appealed
4. What happens if you are declared bankrupt?
The court appoints a trustee and a delegate judge. The bankrupt loses control and management .
The trustee will sell the assets and distribute the revenue in accordance with the legal rules.
Only the trustee can control the company as such, and take the necessary decisions
5. What duties and powers does the trustee have?
The trustee is obliged to sell the assets of bankrupt firm. Public or private or the company as such (but not the debts)
Eventually he can start “a going in concern”. He has to look after the interest of the staff. He has to proceed eventual procedures if they are necessary for the benefit of the bankruptcy. He also has to investigate a possible mismanagement and check legal acts prior to the bankruptcy.
6. What kind of obligations do I have as bankrupt?
The bankrupt has a duty to provide all necessary information to the trustee.
7. How can I monitor the progress of the bankruptcy?
There are 2 possibilities :
There is a platform in Belgium called Regsol. On this internet site the trustee is obliged to download all petitions and accounts. But one can also check the bancrupty file at the registry of the commercial court.
8. How long does a bankruptcy last?
Every bankruptcy is different. In practice a bankruptcy last for at least 6 months. If there is a going concern/ if there are procedures involved it takes a lot longer.
There is no limit, but if it takes too long the court will invite the trustee for an explanation.
9. Can I make arrangements with my creditors in Belgium?
It’s only possible before the bankruptcy. In Belgium there exists a special procedure WCO (Wet Continuïteit Ondernemingen). The debtor / company in trouble can process a petition for the court of commerce. From that moment of the creditors are not able to execute on the assets of the debtor anymore. The creditor can try then to make an arrangement with all the creditors. This agreement will be submitted the court. The court can approve it or refuse it. If the court doesn’t approve it’s an automatic bancrupty.
10. How can an employee collect outstanding salary from his bankrupt employer in Belgium?
First of all the employee has to claim his outstanding salary as well as holiday entitlements and his termination compensation. In Belgium a special institute called Fonds voor Sluiting van Ondernemingen which will pay the employee an amount based on his claim with a maximum of 25.000,00 €. The eventual saldo needs to be paid by via the assets of the bankruptcy. (if there is any)
11. What important advice can be given to a company director in the event of imminent bankruptcy
It is important that the clean administration has been kept. Also the annual accounts need to be completed. If not, the director can be held liable for the debts in the liquidation because of mismanagement. But it is a separate procedure that has to be proceeded before the commercial court.
12. Is there a special arrangement for the private person who is in danger of going bankrupt?
There is a special arrangement for a private person that went bankrupt. But only in case that the private person is of good faith.
Then the court can decide to free the bancrupt person from debts (verschoning). tabula rasa.
This means that when the bankruptcy is closed, the creditors of the private person can not execute on the private persons new assets.