Bankruptcy Procedure in Belgium
Bankruptcy Procedure in BelgiumUpdated on Friday 11th September 2015
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Belgian companies in difficulty
The bankruptcy procedure in Belgium is one of the insolvency proceedings available under the Bankruptcy Law. A company is considered insolvent in Belgium when it is unable to pay its creditors. Bankruptcy proceedings in Belgium can be brought to court. If you need help throughout an insolvency proceeding, our Belgian lawyers can duly represent you and your company.
A company in Belgium is considered bankrupt if it has ceased payments and if it is not creditworthy. Temporary financial issues are not regarded as a cessation of all payments. A good indicator that the company’s creditworthiness is diminished is that third parties refuse to grant credits to the company. These two conditions for bankruptcy in Belgium are closely linked together.
Initiating the bankruptcy procedure in Belgium
The bankruptcy of a company is ordered by court. The company can petition itself (the company’s Directors handle this task) or the bankruptcy can be petitioned by one or more creditors or by the public prosecutor. According to the Bankruptcy Act, when applying for bankruptcy, the debtor’s application must be accompanied by a balance-sheet, a list of its employees and information about its customers and suppliers.
The company directors must petition for bankruptcy within one month after the company fulfils all of the conditions for it. Personal liability may arise if the these proceedures are not initiated in time.
The bankruptcy order in Belgium
The bankruptcy order must specify the date when the company ceased to make payments and include other information, such as: the supervising judge appointed for the case, the timeframe within which creditors must make their claims against the company and the dates at which the list of claims will be closed.
After the court order for bankruptcy is released, the bankrupt company loses control over all its assets. Liquidators handle the liquidation process in Belgium and make sure that the creditor’s claims are met.
The purpose of the bankruptcy procedure in Belgium is to distribute the assets of the bankrupt company to the benefit of its creditors.
If you are interested in other legal procedures, such as the arbitration procedure in Belgium, our Belgian lawyers can offer you complete information and customized advice.