Your debtor is bankrupt: filing a bankruptcy claim in Belgium as a creditor

A customer, tenant or contractual partner goes bankrupt and your invoice remains unpaid. Many creditors resign themselves to this straight away, often wrongly. Filing a bankruptcy claim in Belgium on time and invoking your security correctly considerably increases your chances of full or partial recovery. This article explains, step by step, what you can do as a creditor.

Bankruptcy is declared by the enterprise court (ondernemingsrechtbank / tribunal de l’entreprise) and is governed by Book XX of the Code of Economic Law. The court appoints a bankruptcy trustee (curator / curateur), who realises the bankrupt’s assets and distributes the proceeds among the creditors. As a creditor, you will deal mainly with this trustee.

Step 1: filing a bankruptcy claim via Regsol

You file your claim electronically via Regsol, the Central Solvency Register (Registre central de la solvabilité). Attach the supporting documents: contracts, purchase orders, invoices, reminders and any judgments. Also expressly state your preferential rights or security interests, such as a pledge or a retention of title.

The bankruptcy judgment sets the deadline within which you must file your claim; that deadline may not exceed thirty days from the judgment. An extract of the judgment is published in the Belgian Official Gazette (Moniteur belge) and the trustee normally informs the known creditors. Do not wait for that letter, however: check the deadline yourself and file on time and in full.

A late claim is still possible, but as a rule no later than one year after the bankruptcy judgment (Article XX.165 of the Code of Economic Law); after that, you lose the right to share in the distributions. A creditor who files late also cannot share in distributions that have already taken place.

Step 2: know your ranking

Not all creditors are equal. Broadly speaking, the following categories apply:

• creditors holding security over a specific asset, such as a mortgage or a pledge, and creditors holding a special preferential right (privilège spécial);
• creditors holding a general preferential right, such as employees for certain wage claims, the National Social Security Office (ONSS) and the tax authorities;
• ordinary unsecured creditors, who receive a proportional share of whatever remains, in competition with one another.

Separately from this ranking, estate debts (dettes de masse), such as the trustee’s costs and the debts the trustee incurs on behalf of the estate, are in principle paid before creditors with a general preferential right and ordinary creditors. As a result, little often remains for the latter. Your contractual instruments, such as a retention of title, a pledge or a personal guarantee, therefore directly determine what you recover.

Step 3: activate your security and the alternatives

• Retention of title: if it was agreed in writing, at the latest upon delivery, that you remain the owner until full payment, you can reclaim the delivered goods that are still present in kind at the bankrupt’s premises. Act in time: as a rule, the claim for recovery must be made before the first report on the verification of claims is filed.
• Pledge: a pledge over tangible movable assets, such as stock or machinery, is in principle only enforceable against the trustee if it was registered in the National Pledge Register or if you obtained possession of the asset.
• Personal guarantee: if the company’s manager or a third party stood surety personally, you can claim directly against that guarantor, outside the bankruptcy, within the limits of the guarantee. A consumer who stood surety free of charge may ask the court to be released from the commitment in whole or in part where it is manifestly disproportionate to their income and assets.
• Set-off: if you yourself still owe money to the bankrupt, set-off after the bankruptcy is only possible under strict conditions, for example between closely connected debts arising from the same contract.

If you rely on a retention of title, contact the trustee immediately so that your goods are not sold together with the rest of the stock.

Step 4: follow up the verification of claims

The trustee examines each claim and admits or disputes it, in whole or in part. The trustee’s decisions are recorded in a report on the verification of claims, which is filed in Regsol.

If the trustee disputes your claim or your preferential right, you can put forward your position and the matter can be brought before the enterprise court. Watch the short deadlines. Creditors who follow up their file are not forgotten when distributions are made.

Ongoing contracts with the bankrupt

Bankruptcy does not automatically terminate ongoing contracts. The trustee decides whether to continue performing a contract. As the other contracting party, you can formally call on the trustee to make that decision within fifteen days (Article XX.139 of the Code of Economic Law).

If the trustee opts to continue the contract, the goods or services you supply after the bankruptcy are paid as estate debts, and therefore before ordinary creditors. If the trustee does not continue the contract, you can file your loss as a claim in the bankruptcy. So do not simply keep supplying without the trustee’s clear agreement.

Are you the bankrupt’s landlord?

Under certain conditions, the landlord has a special preferential right over the movable property located in the leased premises. State that preferential right expressly in your claim. The trustee can terminate the lease; rent falling due after the bankruptcy for as long as the trustee uses the premises is in principle an estate debt. Rent arrears from before the bankruptcy are included in your claim.

Beware: payments received shortly before the bankruptcy

If you were still paid shortly before the bankruptcy, the trustee may challenge that payment in certain cases. As a rule, the court can backdate the date of cessation of payments to up to six months before the bankruptcy judgment. The period between that date and the judgment is known as the suspect period (période suspecte).

Payments of debts not yet due, or payments made in an unusual manner during that suspect period, are in principle unenforceable against the estate. Other payments may be as well if the creditor was aware of the cessation of payments. If you have to repay an amount, you can in principle still file your claim in the bankruptcy. Always have such a claim by the trustee reviewed.

Directors’ misconduct

If you lost money through a fault of the directors of the bankrupt company, for example because they continued a hopeless business and kept placing orders, a liability claim may be considered. The trustee usually brings such claims on behalf of all creditors together; whatever the trustee recovers increases the distributions. A creditor who suffers personal loss may, under certain conditions, also take action themselves.

Frequently asked questions

Can I still seize the bankrupt’s assets?

No. After the bankruptcy judgment, ordinary creditors can in principle no longer levy individual attachments on the assets of the estate. They must exercise their rights by filing a claim in the bankruptcy.

When will I receive anything?

Only after the assets have been sold and the claims verified, often after a considerable time. Secured creditors are paid first; for ordinary creditors, little or nothing sometimes remains.

My invoice is small. Is filing a claim worthwhile?

Filing electronically is relatively straightforward. With a retention of title, a preferential right or a guarantor, it is almost always worthwhile. Without those instruments, it depends on the available assets; the trustee can inform you about this.

Can I recover the VAT on my unpaid invoices?

Under certain conditions, you can recover the VAT on an unpaid invoice, namely as soon as it is certain that the claim has been wholly or partly lost; if the customer goes bankrupt, that right arises on the date of the bankruptcy judgment (Article 77(1)(7) of the VAT Code). Coordinate this with your accountant.

My debtor is a sole trader: can they be released from their debts?

Yes, a bankrupt natural person can obtain a discharge of their remaining debts (effacement). If it is granted, you can in principle no longer recover the unpaid balance from them. A creditor may, under certain conditions, ask the court to refuse the discharge; have this reviewed in good time. Read more in our article on debt discharge after bankruptcy.

Novex Advocaten can assist you

We file your claim, enforce your security, follow up the verification and pursue guarantors and directors where possible. See also our articles on recovering unpaid invoices and on directors’ liability in bankruptcy.

Call 0484 99 22 72 or email asfour@novexadvocaten.be: the sooner you act, the more you recover.