Debt discharge after bankruptcy in Belgium: how to get a clean slate

The most important right of a bankrupt individual is also the least known: the discharge of residual debts (kwijtschelding / effacement). Debt discharge after bankruptcy releases you from the debts that remain once the bankruptcy has been liquidated, so that you can start a business, work and build up again without the burden of the past. Since 2023, the rules have changed fundamentally. This article explains how discharge works in Belgium today, when it can be refused and what you can do yourself to secure it.

Who is eligible for discharge?

Only individuals who have themselves been declared bankrupt, such as a self-employed person running a sole proprietorship or a member of a liberal profession. A bankrupt company with legal personality ceases to exist when the bankruptcy is closed; discharge does not apply to it. You can read more about this distinction in our article on the bankruptcy of a sole trader versus a company.

The director of a bankrupt company is not automatically declared bankrupt as well. He or she may, however, be personally liable, for example under a personal guarantee or following a liability claim against the director. The company’s bankruptcy offers no protection against such personal claims.

Debt discharge after bankruptcy since 1 September 2023: no application needed

The Act of 7 June 2023, which transposed the European Restructuring and Insolvency Directive (EU) 2019/1023, simplified the system. For bankruptcies opened since 1 September 2023, the bankrupt no longer has to file a separate application for discharge. Discharge is in principle granted automatically on the closure of the bankruptcy (Article XX.173 of the Code of Economic Law). The rule is therefore that the bankrupt individual is released from the residual debts; refusal is the exception.

If the bankruptcy was opened before 1 September 2023, the former rules in principle still apply, under which the bankrupt had to apply for discharge within a set time limit. In that case, have the status of your file checked.

Can discharge be refused?

Yes, in whole or in part, but only on limited grounds. Any interested party, including the trustee in bankruptcy (curator / curateur) and the public prosecutor, can ask the enterprise court (ondernemingsrechtbank / tribunal de l’entreprise), by application (verzoekschrift / requête), to refuse discharge where the bankrupt has committed manifestly serious faults that contributed to the bankruptcy. Examples include:

• deliberately removing or concealing assets;
• serious fraud against creditors or the authorities;
• continuing a hopeless business at the expense of the creditors.

Knowingly incorrect information given to the supervising judge (rechter-commissaris / juge-commissaire) or the trustee can also jeopardise your discharge. An application for refusal must be filed within three years after the expiry of the one-year period, running from the bankruptcy judgment, for the late filing of claims. An economic setback, a poor commercial judgement or a major customer’s failure to pay are not, in themselves, manifestly serious faults. In such proceedings, we defend your case with figures and context.

Which debts are excluded from discharge?

Discharge is broad, but not unlimited. It has no effect on:

• maintenance debts, such as child maintenance or spousal maintenance owed to a former partner;
• debts arising from the obligation to compensate damage linked to the death of a person or an injury to their physical integrity, caused by the bankrupt’s fault.

Criminal fines and confiscations are not covered by discharge: according to the Court of Cassation, only the King can remit penalties (Cass. 29 March 2024). For the rest, all residual debts are in principle discharged: supplier credit, bank debts, social security debts and tax debts.

Security rights in property, such as a mortgage on an asset of the bankrupt, are as a rule already enforced during the liquidation. The creditor is then paid with priority from the proceeds of the encumbered asset. Whatever remains outstanding afterwards is in principle an ordinary residual debt.

Protection for your partner and for a gratuitous guarantor

A spouse or legal cohabitant (wettelijk samenwonende / cohabitant légal) who is personally liable for a debt that the bankrupt incurred during the marriage or legal cohabitation is also released from that debt as a result of the discharge. The same applies to a former spouse or former legal cohabitant.

A consumer who provided a personal guarantee for the bankrupt free of charge, for example a relative who stood surety without gaining anything from it, can ask the court to be released in whole or in part. This is possible where the commitment is manifestly disproportionate to that person’s income and assets.

What about your guarantors and co-debtors?

Discharge releases the bankrupt personally. Anyone who is jointly liable with the bankrupt for a debt or who stood surety remains in principle bound, except in the cases of the partner and the gratuitous guarantor discussed above. A bank that obtained a guarantee from a friend or relative can therefore still claim against that guarantor, unless the guarantor successfully applies for release.

Check who guarantees your debts and whether that person can rely on the protection for gratuitous guarantors. Have this reviewed in good time, so that the guarantor can file the application correctly.

What you earn after the bankruptcy is yours

Assets and income you acquire after the bankruptcy judgment in principle fall outside the bankruptcy estate. Together, discharge and this rule form the basis of your second chance: you can get back to work straight away, without your new income going to old creditors.

Those new assets and that income are therefore in principle not used to pay debts from before the bankruptcy, with the exception of the excluded debts mentioned above, such as maintenance debts. Smooth cooperation with the trustee helps the bankruptcy to be wound up quickly, and therefore also speeds up your own fresh start.

Frequently asked questions

Do I have to do anything to obtain discharge?

For a bankruptcy opened since 1 September 2023, a separate application is no longer required. Your loyal cooperation with the trustee nevertheless remains essential: knowingly incorrect information can jeopardise your discharge.

Are my private debts also discharged?

Yes. For an individual, the bankruptcy covers the entire estate, subject to a few exceptions. Discharge in principle applies to all residual debts, both business and private, except for the debts mentioned above.

I am not an entrepreneur. Can I still obtain a discharge?

Not through bankruptcy. An individual with excessive debts can, however, apply for a collective debt settlement (collectieve schuldenregeling / règlement collectif de dettes) to the labour court (arbeidsrechtbank / tribunal du travail). Anyone who has ceased a self-employed activity must in principle first wait six months, and special rules apply after a bankruptcy. Have your situation assessed.

What if discharge is partially refused?

Legal remedies are available against the decision, within short time limits. Have the decision reviewed immediately. A partial refusal leaves the discharge in place for the rest.

Can I start a new business after bankruptcy?

In principle, yes. Bankruptcy in itself does not prevent you from running a business again, unless a court imposes a professional ban. Do prepare your new start carefully, with a realistic financial plan.

Novex Advocaten is here to help

We assist bankrupt individuals during the bankruptcy and defend their discharge against a claim for refusal. Partners and guarantors who are pursued after a bankruptcy can also turn to us. Also read our articles on what happens after the bankruptcy judgment and on making a fresh start after bankruptcy.

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