Filing a petition for bankruptcy as a creditor
A debtor who refuses to pay outstanding invoices can be put under pressure to pay by means of a bankruptcy petition. You can file a petition for bankruptcy as a creditor either at your own request or on behalf of one or more creditors. The purpose of this petition is often not to actually have a debtor declared bankrupt, but to increase the pressure on business debtors who have neglected to pay on time. If a claim is not disputed, this petition is often faster and cheaper than legal proceedings.
Bankruptcy petition by the creditor
Filing a petition for bankruptcy as a creditor is subject to conditions. The most important and most obvious condition is that a debtor, such as a person, company, foundation or association, is failing to pay outstanding invoices or bills. Does a debtor have two or more debts with different creditors with at least one of these debts being due and payable? In that case, there is sufficient reason for the creditor or creditors to file a bankruptcy petition at the court. One creditor is sufficient to file a petition for bankruptcy. Bankruptcy can only be declared when it is demonstrated that a debtor has more than one creditor.
Having someone declared bankrupt
Having someone declared bankrupt starts with filing a bankruptcy petition. Creditors who are affected by a debtor’s failure to meet his financial obligations can do this. Does a company have multiple creditors? These parties often appeal to the court in a joint effort. In that case, the appointment of a lawyer is mandatory. If so desired, filing a petition for bankruptcy as a creditor at your own request is possible without a lawyer. If the court agrees with the creditor(s) and it can be demonstrated that debts can no longer be paid, the court will declare the bankruptcy. A bankruptcy trustee determines the division of the bankruptcy estate.
A bankruptcy petition in six steps
The procedure for filing a petition for bankruptcy as a creditor consists of six steps: Step 1: Filing the bankruptcy petition and starting the procedure Step 2: Summons for the hearing in court Step 3: Debtor’s statement of defence against the petition Step 4: Closed session in which the creditor is obliged to be present Step 5: Court decision Step 6: Possibility to file an objection, appeal and cassation.
Filing a petition for bankruptcy as an employee
Employees too can file a petition for bankruptcy as creditors. When wages are not paid and the claim for wages does not provide the desired outcome, staff can file a petition for bankruptcy as employees. In doing so, an employee thus takes a conscious risk. The risk of unemployment is real, but by filing for bankruptcy in respect of the employer, the financial damage can be limited. In the event of bankruptcy of a company, the employment contract of the employee, who is also entitled to benefits, remains in place. This is usually cancelled by a bankruptcy trustee shortly after the bankruptcy, as a result of which an employee is entitled to continued payment of the salary or a possible severance payment. In the first six weeks after a bankruptcy, the Employee Insurance Agency pays the full salary.
Advice when filing a petition for bankruptcy as a creditor
When filing a petition for bankruptcy hiring a lawyer is not mandatory when it concerns your own company. Filing a bankruptcy petition and filing for bankruptcy in court as a creditor for a debtor must be done by a lawyer. Fruytier Lawyers in Business has extensive experience in advising and litigating regarding bankruptcies and collection services. We provide committed and personal advice in your situation, support in the preparation of the documents and submitting the bankruptcy petition. Our specialists in bankruptcy law and corporate law will be happy to assist you during the session. Feel free to contact us for more information.