Dutch Bankruptcy Act
The Dutch Bankruptcy Act, instituted in 1896, has undergone several changes since its introduction. There are three types of bankruptcy or insolvency procedures regulated under the Act.
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Bankruptcy
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The District Court in the Netherlands can declare any person or private legal entity bankrupt; additionally, applications for bankruptcy can be filed by people, private legal entities, creditors or public prosecutors, according to Kernkamp Advocaten law firm. If the court rules in favor of bankruptcy, a trustee is appointed to liquidate and regulate the debtor's assets.
Suspension of Payments
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The Act makes possible suspension of debt payments for businesses with financial problems, as long as the business is viable as a whole or in parts. However, companies that are granted this suspension are usually declared bankrupt by the courts within a few weeks.
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Debt Restructuring
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Debt restructuring is provided for individuals with substantial debt who have little hope of getting out of it. It is intended to provide relief from creditors who otherwise may pursue the debtor for life, according to Kernkamp Advocaten.
International Issues
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Bankruptcy issues that cross national Dutch borders are regulated not by the Dutch Bankruptcy Act but by European Union Insolvency Regulation or the Dutch Private International Law.
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References
- Photo Credit Bankrupt. Businessman with empty pockets (with clipping paths) . image by Vitaliy Pakhnyushchyy from Fotolia.com
