Insolvency and insolvency law
When a company or organization can no longer meet its financial obligations, it becomes insolvent. This situation is often the gateway to bankruptcy. The legal area dealing with insolvency is called insolvency law or bankruptcy law. An insolvency lawyer specializes in bankruptcy law, suspension of payment and debt restructuring.
Impact of insolvency
The concept of insolvency applies to businesses and companies in acute financial difficulties. In this situation, a petition from a creditor can lead to the bankruptcy of a company. The term, derived from the Latin verb ‘solvere’ (to pay), is used in Europe to describe all possible arrangements for the financial insolvency of companies and individuals.
The three insolvency schemes
Dutch law distinguishes three insolvency schemes, namely bankruptcy, suspension of payment and the Debt Restructuring (Natural Persons) Act. A company with payment problems and outstanding debts may consider filing for bankruptcy or deferment of payment of its own volition. When applying for a suspension of payment, which is to be granted by the court, a company is given breathing space to prevent bankruptcy and put things in order. This is often achieved by agreeing on a composition with creditors to secure the survival of the organization.
Hire a specialist in insolvency law
In the case of insolvency, the shortage of financial resources is structural. An insolvency lawyer assists companies in financial difficulties in making the best choices in testing times and possibly preventing bankruptcy. A specialist does this on the basis of a clear analysis of the company, early advice where possible, the restructuring of the company or mediating with creditors. An insolvency lawyer also assists companies that want to file a petition for bankruptcy against a debtor.
Debt restructuring and insolvency register
If a company or person is subject to bankruptcy, suspension of payment or the Debt Restructuring (Natural Persons) Act, this is registered in the Central Insolvency Register (CIR). This register contains the details of bankruptcies, suspensions of payment and debt restructuring, all of which are kept in the local registers at the various courts. The register is public and can be consulted online.
Decisive advice in uncertain times
An insolvency process is a hectic, troubling phase for companies. Liquidity problems not only create tension within the company but creditors too often step up the pressure. This does not make a composition with creditors or the refinancing or restructuring of a company any easier. Finding a solution as quickly as possible is a priority for all parties in this situation. The experts in insolvency law and bankruptcy law at Fruytier Lawyers in Business provide peace of mind and perspective in uncertain times. Would you like to receive more information about insolvency or are you curious about our committed approach? Feel free to contact us for no-obligation, decisive advice.