[guest article]

Are your bills piling up but you can no longer pay them? Are your creditors pursuing you and enforcement measures being taken (seizure)? Do you see no way to save your struggling self-employed business? Have you considered declaring bankruptcy?

It is true that declaring bank​ruptcy is a difficult solution to consider, but it is better to do so in good time to avoid being declared bankrupt (by a creditor or at the request of the Public Prosecutor).

What are the conditions for being declared bankrupt ?

To be declared bankrupt, the law stipulates three cumulative conditions:

1. Be a business (self-employed, legal entity, other organisation without legal ​personality)
2. Be in persistent default (you are no longer able to pay your bills and this is not temporary)
3. Be in financial distress (your creditors no longer trust you and will no longer grant you credit or payment terms)

Bankruptcy: what are the important steps ?

1. Filing for bankruptcy

The declaration of bankruptcy must be submitted online via the digital platform ‘regsol.be’.

You will be asked to provide a few documents:

• • A list of your creditors (those to whom you owe money);
  • A list of your debtors (those who owe you money);
  • A recent accounting statement;

When filing this declaration, it is already possible, but only if you are self-employed, to file a request for the cancellation of your debts. This request is important because it will allow the court, when closing your bankruptcy case, to rule on the cancellation of your debts and thus release you from your obligations to your creditors.

Once the documents have been filed and the information completed, you will receive an email with the date and time of the hearing before the court with territorial jurisdiction.

2. Hearing before the territorially competent commercial court

At this hearing, the court verifies whether the conditions for bankruptcy have been met (see above). If so, the court issues a judgment declaring bankruptcy and appointing a trustee.

3. Bankruptcy proceedings

This is your first meeting with the trustee. The trustee will ask you a series of questions to understand your situation and the reasons that led you to file for bankruptcy.

At this meeting, the trustee will draw up an inventory of your assets (furniture, money in your bank account, etc.). It is important to note that your assets will be limited to those acquired on the date you filed for bankruptcy, which means that anything you receive after that date, such as a salary, cannot be taken into account by the trustee.

4. Accountability and closing hearing

This is the final stage. As part of their duties, the trustee will manage the assets acquired on the date of bankruptcy in order to liquidate them and distribute the proceeds among the creditors.

At the closing hearing, the court will rule on your request for debt relief, but only if you are a natural person (self-employed). The court will then issue a judgment closing your bankruptcy proceedings.

What can I do during the bankruptcy period ?

As a self-employed person who has gone bankrupt, you may be entitled to transitional benefits (allowances) from your social security fund. These allowances can be granted for a maximum period of twelve months.

You can also start a new activity as an employee or self-employed person. However, there may be some administrative difficulties in the case of self-employment (e.g. bank account).

Of course, every situation and every bankruptcy is different. Do not hesitate to seek advice from a professional (e.g. solicitor or accountant).

About the author

Magalie DEBERGH
Lawyer at the Brussels Bar