As of 1 December 1998, the Dutch Bankruptcy Act contains a debt rescheduling scheme for natural persons. Section 284 of the Dutch Bankruptcy Act provides that a natural person may apply for an order for the implementation of a debt rescheduling scheme, if it is reasonably foreseeable that he will be unable to pay his debts as they fall due or if he is in a situation in which he has ceased to pay his debts as they fall due. A petition for the implementation of a debt rescheduling scheme shall include a reasoned statement issued by the executive body of the authorities of the municipality of the residence or place of abode of the debtor, explaining why there is no realistic possibility of an extra-judicial debt rescheduling and the extent to which the applicant is able to settle his debts.

If a debt rescheduling scheme is granted, the district court will appoint an administrator (bewindvoerder) and a supervisory judge (rechter-commissaris), who supervises the actions of the administrator.

A debt rescheduling scheme shall have effect with regard to claims against the debtor existing at the time of the order for implementation of the debt rescheduling scheme. The court determines the amount of income which the debtor may keep each month to pay its living from. All amounts the debtor earns above this amount must be paid by the debtor to a special bank account.

The district court is entitled to include provisions in the rescheduling plan which, taking all circumstances into account, appear reasonable and fair. Such provisions may include the obligation to find a job or to keep the current job. In a rescheduling plan the court shall set the period during which implementation of the debt rescheduling scheme shall apply. In general this period is three years. It may be extended till a maximum five years. If the amount saved on the special bank account is sufficient to wholly or partially make payments to creditors a meeting of creditors (verificatievergadering) will be held.

The debtor has the possibility to propose a composition at a meeting of creditors. If a composition is accepted, the debt rescheduling scheme ends. If no composition is proposed the court shall consider the termination of the implementation of a debt rescheduling scheme at the end of the period referred to above. The court shall consider whether or not the debtor has fulfilled all its obligations under the debt rescheduling scheme. If so the debtor will be granted a fresh start (schone lei). In that case a claim to which the debt rescheduling scheme applies shall, insofar as this has not been satisfied, no longer be enforceable, irrespective of whether or not the creditor entered a claim in the debt rescheduling scheme. The amount saved on the bank account will distributed under the admitted claims.

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