Declared bankrupt in Belgium: your rights and obligations after the judgment

Judgment has been delivered: you or your business have been declared bankrupt in Belgium. What follows is unfamiliar territory for most entrepreneurs: a trustee who takes over management, creditors who lodge their claims, and questions about your home, your income and your future. This article sets out your rights and obligations after the bankruptcy judgment, so that you know what to do next.

Declared bankrupt in Belgium: the judgment and the first days

In the bankruptcy judgment, the enterprise court (ondernemingsrechtbank / tribunal de l’entreprise) appoints one or more trustees in bankruptcy (curator / curateur) and a supervisory judge (rechter-commissaris / juge-commissaire). The judgment also sets the deadline by which creditors must lodge their claims. An extract is published in the Belgian Official Gazette (Belgisch Staatsblad / Moniteur belge), and the file is kept digitally in the Central Solvency Register (Regsol).

The effects are immediate. From the day of the judgment, and not only from its publication, the bankrupt automatically loses the management of their assets: only the trustee can still dispose of them. As a rule, creditors can no longer take individual enforcement action against the bankrupt estate.

The role of the trustee

The trustee is, as a rule, a lawyer appointed by the court. The trustee manages and liquidates the bankrupt estate: drawing up an inventory, selling the assets, examining the claims lodged and distributing the proceeds among the creditors according to their ranking. The trustee also investigates how the business was run.

The trustee is not your opponent, but nor are they your adviser: they defend the interests of the estate and of the creditors as a whole. Your own lawyer protects your position during interviews, disputes and the winding-up. The supervisory judge oversees the trustee’s work.

Your obligations as a bankrupt

• you cooperate loyally with the trustee and hand over the accounts, the keys, the bank details and all information they request;
• you appear whenever the trustee or the supervisory judge summons you;
• you report any change of address;
• you no longer dispose of the estate’s assets yourself and do not take any assets with you.

This cooperation is not merely compulsory. Knowingly providing incorrect information can also lead to your discharge being refused. If a company has been declared bankrupt, these obligations rest with its directors.

Ongoing contracts and staff

Bankruptcy does not automatically terminate all ongoing contracts. The trustee decides whether to continue performing a contract, for example to complete an ongoing assignment or to continue the business temporarily with a view to a sale. In most cases the employment contracts are terminated; the employees lodge their claims in the bankruptcy and may, under certain conditions, turn to the Business Closure Fund (Fonds Sluiting Ondernemingen, FSO / Fonds d’indemnisation des travailleurs licenciés en cas de fermeture d’entreprises, FFE).

Creditors’ claims

Creditors lodge their claims electronically via Regsol, within the deadline set by the judgment. The trustee examines each claim and either admits or disputes it. Disputed claims are, if necessary, decided by the court. As the bankrupt, you can point out to the trustee any claims that are incorrect, for example because an invoice had already been paid.

Are you yourself a creditor of a bankrupt customer? Find out how to lodge your claim as a creditor.

Your income and new activities after bankruptcy

A key principle of current insolvency law, set out in Book XX of the Code of Economic Law (Wetboek van economisch recht / Code de droit économique), is the second chance. Assets and income that you acquire as a natural person after the bankruptcy judgment fall, as a rule, outside the estate. Whatever the law declares exempt from seizure, such as essential household goods, also remains outside the estate.

You may therefore work again, as an employee or on a self-employed basis, and that new income is yours to keep. A professional ban may, however, rule out certain activities. Amounts owed for work you carried out before the judgment, such as an outstanding invoice, do form part of the estate. Nor should you take over any assets of the bankrupt business without the trustee’s consent.

Discharge of your remaining debts

If you have been declared bankrupt as a natural person, you are in principle released from the debts that remain after liquidation, known as discharge (kwijtschelding / effacement). For bankruptcies opened since 1 September 2023, you no longer need to apply for discharge separately. If your bankruptcy was opened before 1 September 2023, the former rules apply; have it checked whether you applied in time.

Any interested party, including the trustee and the public prosecutor, may ask the court to refuse discharge in whole or in part. This is possible above all if you committed manifestly serious faults (kennelijk grove fouten / fautes graves et caractérisées) that contributed to the bankruptcy. Knowingly giving incorrect information to the supervisory judge or the trustee can also jeopardise discharge. Economic misfortune is not, in itself, a manifestly serious fault.

Some debts are excluded from discharge in any event, including maintenance debts and the obligation to compensate damage you caused through your own fault by the death of a person or harm to their physical integrity (Article XX.173 of the Code of Economic Law).

What if you were a director of a bankrupt company?

A company’s bankruptcy does not automatically make you, as a director, bankrupt yourself. The trustee may, however, hold you personally liable, for example if a manifestly serious fault by the board contributed to the bankruptcy, or if you continued a loss-making activity when there was reasonably no longer any prospect of saving the business. Read more in our article on directors’ liability in bankruptcy.

In addition, special rules allow directors, under certain conditions, to be held liable for the company’s unpaid VAT, payroll withholding tax or social security contributions. The bank can also recover a personal guarantee given for a company loan from you directly, outside the bankruptcy.

Closure of the bankruptcy

Once the trustee has liquidated the estate and distributed the proceeds, the court closes the bankruptcy. If the assets are too small to cover the costs, the court may also close the bankruptcy for insufficient assets. A bankrupt company ceases to exist upon closure. For a natural person, closure marks the end of the liquidation of the estate.

Frequently asked questions

Can I remain a director of another company?

In principle yes, unless a court imposes a professional ban (beroepsverbod / interdiction professionnelle). The enterprise court may impose such a ban if a manifestly serious fault on your part contributed to the bankruptcy. A criminal conviction for certain offences can also lead to a professional ban.

What happens to my home?

If you yourself have been declared bankrupt, your home in principle falls into the estate, depending on your matrimonial property regime and on who owns it. A declaration of unseizability (verklaring van onbeslagbaarheid / déclaration d’insaisissabilité) made earlier before a notary can, under certain conditions, protect your main residence against creditors whose business debts arose after that declaration. Have this checked urgently.

How long does a bankruptcy take?

Anything from a few months to several years, depending on the size of the estate, any disputes and the sale of real estate. The trustee reports regularly to the supervisory judge on the progress of the liquidation.

Can I still challenge the bankruptcy judgment?

Under certain conditions yes, but the deadlines are very short: fifteen days from service of the judgment for an objection (verzet / opposition), and fifteen days from publication in the Belgian Official Gazette for third-party opposition (derdenverzet / tierce opposition) and appeal (Article XX.108 § 3 of the Code of Economic Law). Bankruptcy presupposes that the business has persistently stopped paying its debts and that its creditworthiness has been undermined. If you have doubts about this, have it checked immediately whether a legal remedy makes sense.

Do I need my own lawyer alongside the trustee?

It is not compulsory, but it is advisable. The trustee protects the interests of the estate and the creditors. Your own lawyer safeguards your discharge, your position as a director and your fresh start.

Novex Advocaten: bankruptcy lawyer in Brussels

We assist bankrupt entrepreneurs and directors, including before the Dutch-speaking and French-speaking enterprise courts in Brussels, in their dealings with the trustee, in disputes and with discharge. Also read our articles on debt discharge after bankruptcy, on making a fresh start after bankruptcy and on the bankruptcy of a sole trader versus a company.

Call 0484 99 22 72 or email asfour@novexadvocaten.be.