Personal bankruptcy of director or manager
New law on personal bankruptcy of directors
Since the new law of May 1, 2018, personal bankruptcy of a director or manager is also possible, separate from the bankruptcy of the company in which they acted.
Book I of the Economic Law Code (ELC) provides in Article 1.1 §1 its definition of the term “enterprise.” Book XX concerning bankruptcy also refers to that definition: Every natural person who carries out a professional activity independently.
This includes everyone except employees, including directors or managers of a company. The law states that a director or manager exercises a self-employed professional activity by acting as a director or manager of the bankrupt company.
Implications of the law
The law does not impose any other conditions. It follows that when it concerns employees, the labor court will be competent and a debt mediation procedure can be initiated.
When it concerns directors or managers, however, the enterprise court is competent and personal bankruptcy of a director or manager can be pronounced.
This is a good thing, as debt mediation procedures can last up to 7 years, while bankruptcy can usually be handled much faster.
Deadline
The personal bankruptcy must be filed no later than six months after the bankruptcy of the company of which you were a director, if you realize that the bankruptcy of the company is causing you serious financial difficulties. If this deadline has passed, the only remaining option is to seek relief through the procedure of collective debt settlement. However, this means that you will have to make significant monthly payments for up to seven years under the supervision of a debt mediator.
Appeal
The deadline for appealing against the rejection of a bankruptcy or the declaration of bankruptcy with which one disagrees is 15 days.
Frequently asked questions on personal bankruptcy of directors
Yes, since 1 May 2018, a director or manager can be declared personally bankrupt if they are acting independently in a professional capacity.
No later than six months after the bankruptcy of your company, if you find that you are in serious financial difficulties.
That leaves only the collective debt settlement procedure open, which means that you will have to make monthly repayments under administration for years
Yes, you have 15 days to appeal a rejection or declaration of bankruptcy.
Bankruptcy is usually completed faster than debt mediation, which can take up to seven years under the supervision of a debt mediator.
