Filing for bankruptcy of your debtor

In practice, we see that many debtors pay selectively. They pay first the parties who put the most pressure. A bankruptcy petition is the toughest tool you can use in this regard.

From the moment the court considers the application, your debtor knows it is serious. If payment is not made, the business may cease to exist. In most cases, this pressure ensures that there is suddenly room to pay or a firm payment plan.

The psychology behind a bankruptcy filing

No business owner wants their company to go bankrupt. Bankruptcy means loss of control, a trustee watching, and sometimes even personal liability. That very fear makes your claim suddenly appear at the top of the pile.

Have you already gone through a full debt collection process, for example with an amicable process and possibly court proceedings? Then a bankruptcy petition may be the last and most effective step.

You cannot immediately file for bankruptcy for every unpaid invoice. The Bankruptcy Code sets clear conditions. Broadly speaking, there are three points:

• Your claim must be due
  The payment period must have expired. You must have clearly reminded the debtor, for example with a final demand letter or WIK letter. If you need help with that, see our page about the final demand letter.
• There must be multiple creditors
  This is called plurality of creditors. In other words, you are not the only one getting money. At least one other creditor is needed with a support claim. That could be another supplier, but also the Tax Office or a landlord.
• The debtor has stopped paying
  This means that bills remain unpaid structurally. So not one isolated error, but a real payment problem situation.

No idea if there are other creditors?

That is quite normal. You usually don't know which parties are also after their money. Our specialists and our lawyer will investigate this for you and see if there is a suitable support claim. So you are not alone in this.

A bankruptcy petition is legally custom-made. You are not allowed to do this yourself in the Netherlands. A lawyer is mandatory. At Credifin, we arrange the entire process together with our regular specialized lawyer.

Step 1: Final summons before bankruptcy

We start with a final, clear summons. In this letter, we announce that we will file for your debtor's bankruptcy if payment is not made quickly. Often this is enough to get your debtor moving.

Step 2: File preparation by our lawyers

Our lawyers review your file and check that everything is legally correct. We collect supporting documents such as invoices, general terms and conditions, reminders and any previous steps such as an amicable collection process or a subpoena. We also look at possible support claims.

Step 3: Petition by our attorney

Next, our attorney will draft the petition. This is the official document by which bankruptcy is filed with the court in the district where your debtor is located.

Step 4: Court hearing

Usually the court schedules a hearing within three to six weeks. Your debtor will be summoned to attend. In practice, we often see that debtors pay or propose a settlement just before the hearing.

Step 5: Judgment or settlement

If your debtor still pays or you come to an arrangement, then the goal is achieved and the application is often withdrawn. If this does not happen and the conditions are met, the court may declare bankruptcy and a trustee is appointed.

Filing for bankruptcy often sounds like something that costs a lot of money. That's why we work with a clear and fixed fee, so you know exactly where you stand.

Fixed rate through our lawyer: € 2000

For this amount you get:

• Review of your case by our collection specialists
• The final summons towards your debtor
• Preparation and filing of the petition by our specialized lawyer
• Representation at court hearing

Other costs

In addition to this flat rate, there are two other types of fees you need to consider:

• Court fee
  This is the cost you pay to the court to have the case heard. You can find more explanation on our page on court fees.
• Bailiff fees
  The summons to the hearing must be officially served by a bailiff. You can read more about this in our information on the bailiff.

We try to recover these costs, as well as your principal and any legal interest, from the debtor as much as possible.

Of course, you can look for any law firm on your own. Yet many business owners choose Credifin instead. This is for a few obvious reasons.

• Always focus on debt collection
  We are not a traditional law firm. We are a collection agency with a strong legal arm. Our goal is not to litigate for as long as possible, but to get you paid as quickly as possible.
• Fixed price, no surprises
  No hourly rate and no open-endedness. You know in advance that the bankruptcy filing through our lawyer will cost €2000. That gives peace of mind and clarity.
• Strength of collection agency, lawyer and bailiff
  We combine our experience in debt collection with the clout of a specialized lawyer and the resources of the bailiff. This way you deploy the heaviest means at once.
• Always understand your case
  Through your online dashboard, you follow the status of your case and bankruptcy filing at your convenience.

In addition, we always first consider with you whether filing for bankruptcy is really the best step. Sometimes a targeted collection through our standard processes is enough to get results.

Sometimes you hesitate between ordinary proceedings with a subpoena and a bankruptcy filing. Both means have their own purpose and impact.

Which route is best for you depends on your situation, the amount and your debtor's attitude. Together we look at which approach gives you the greatest chance of results.

In a portion of cases, the debtor ultimately does not pay and bankruptcy is actually declared. The trustee then takes control of your debtor's business.

So what does Credifin do for you?

• We file your claim with the trustee
• We will help you with the necessary documents and forms
• We advise you on the tax steps you can take

After bankruptcy, the likelihood of full payment is lower because there are often multiple creditors. Still, there are significant advantages:

• You can write off your claim for tax purposes
• You can reclaim the previously paid VAT from the tax authorities
• Directors' liability may be investigated in case of serious mismanagement

We think with you at every stage about what is still feasible and sensible for you. Even if full payment is no longer realistic, we look for the best way out.

The longer you wait, the more likely your debtor's debts will accumulate and there will be nothing left to collect. A timely and thoughtful move can make the difference between getting paid or permanently writing off.

Want to know if a bankruptcy filing makes sense in your case? Contact our team or submit your case directly. Then together we will see which route will give you the quickest clarity.