The new “Insolvency Law” was approved by the Belgian Federal Parliament on 13 July 2017.
As from 1 May 2018, the new Insolvency Law will replace the Bankruptcy Law of 8 August 1997 and the Law of 31 January 2009 on Company Continuity (“WCO”).
The central points in this new legislation are the detection, follow-up and remediation of companies in destress.
The new Insolvency Law constitutes a thorough reform of this topic of Belgian law, its main reforms and new emphases are:
- Expansion of the scope of the law in order to pursue a better match with the economic reality of the company.Pursuant hereto, accountants, lawyers, notaries, doctors, etc. can also go bankrupt.
- The distinction between commercial and non-commercial will disappear and make place for a broader and more modern concept.
- Modernization of the insolvency file.A central register will be created which should help to make proceedings faster and more efficient.
- The new Insolvency Law opts for full electronic proceedings, and strives to involve all actors more often and more proactively in the proceedings.
- Improved detection of companies in destress by the computerization of the proceedings.
- Strengthen the ability to better facilitate the preparation of bankruptcy proceedings by the introduction of a “quiet” bankruptcy, which is intended to prepare for a real bankruptcy on a discrete basis and as a solution for liquidation.
- The new Insolvency Law provides for the bankrupt to start, during the settlement of the bankruptcy, a new company, which must be seen separately from the bankrupt company.
- Better guidance of the “second chance” by encouraging companies to take a new start, by ensuring that failures are no longer stigmatized and by stopping certain abuses as identified in practice.
- Focus on extrajudicial proceedings in order to make those proceedings more appealing and to relieve the courts.
- Integration of a coherent set of rules regarding the liability of entrepreneurs and introduction of the concept of “wrongful trading” in Belgian legislation in order to encourage companies to intervene as quickly as possible.
The present overview is made based on information distributed in public channels without consultation of the final law and should not be considered as legal advice on which can be relied without further specific legal advice.