When faced with bankruptcy proceedings, it is paramount that you act quickly in order to avoid unnecessary costs and stress.

The bankruptcy proceedings

As of 1st October 2017, debt recovery and collections in both the commercial and consumer world is going to see a big change with the introduction of the debt recovery Pre-Action Protocol (‘PAP’).

There has been a previous pre-action protocol, introduced in 2014, which was in many ways accepted as a sensible approach to collection of all debts.

Ever since the introduction of the ‘out of court’ procedure to appointment an administrator, there has been a practice of filing successive Notices of Intention to Appoint an Administrator. This practice has been the topic of much discussion and its legality was recently addressed by the Court of Appeal in the case of JCAM Commercial Real Estate Property XV Limited –v- Davis Haulage Limited [2017] EWCA Civ 267.

Introduction

Introduction

Luxembourg recently adopted a number of legislative reforms aimed at modernising the rules applicable to commercial companies. In relation to the restructuring and insolvency of Luxembourg-based entities, Parliament is discussing the long-awaited Bill 6539 (the so-called 'Insolvency Bill').

In the meantime, a number of reforms which could affect the restructuring and insolvency of commercial companies have been adopted, including:

Today, thanks to the high-cost of current court fees, small to medium-sized enterprises (SMEs) face the problem of not getting paid by a customer and then, subsequently, not being able to go to court to get paid.

On 6 April 2017, the Insolvency Rules 2016 came into force. The new rules aim to modernise the insolvency process; and make it more efficient. Physical meetings, as the default decision making process, have been abolished. Where the debtor ‘customarily’ communicated with a creditor by way of email notices can be served by email under deemed consent, rather than through the post. The rules also introduce the use of websites to publish notices, without the need to inform creditors of any postings.

A bill containing an entirely new Insolvency Code was presented to the House of Representatives on 20 April 2017. The need for a robust insolvency framework has received substantial attention due to the ongoing economic and financial crisis. Many European countries have recently modernised their insolvency legislation or are in the process of doing so.

When someone is made bankrupt, all property owned by them, at the date of bankruptcy, forms part of the bankruptcy estate. Property not only includes physical assets, such as goods, land and money, but also intangible assets, such as a cash balance with a bank, debts, benefits under contracts, legacies and causes of action. These assets are known as ‘things in action’. The bankruptcy estate vests in a trustee in bankruptcy upon appointment.

In the framework of the digitization of the Belgian judiciary, a central Solvency Register (www.regsol.be) will be available as of 1 April 2017.

Henceforth, creditors must file their claims electronically. The register will be accessible - subject to different procedural formalities - to magistrates, including substitute judges, clerks of court and public prosecutors as well as bankrupt parties, their creditors and counsel.

In a judgment of 24 March 2017 (in Dutch), the Supreme Court of the Netherlands upheld the longstanding requirement that for a debtor to be declared bankrupt, there need to be at least two creditors.