What is bankruptcy (faillissement) in the Netherlands?

Dutch term: Faillissement | Legal basis: Faillissementswet

Bankruptcy (faillissement) in the Netherlands is regulated by the Dutch Bankruptcy Act (Faillissementswet). A company or individual is declared bankrupt by the District Court when it has ceased paying its debts and there is at least one other unpaid creditor (the pluraliteit van schuldeisers requirement).

The court appoints a bankruptcy trustee (curator) who takes control of the debtor's assets, investigates the debtor's affairs, and distributes the proceeds to creditors according to statutory ranking rules. Secured creditors (mortgage, pledge, retention of title) generally rank ahead of unsecured creditors. The Dutch tax authority has preferential status for certain claims. Directors may face personal liability under article 2:248 BW if they have manifestly mismanaged the company.

Why it matters for international businesses

For creditors, filing a bankruptcy petition can be a strategic tool to force payment of an undisputed debt, but it cannot be used for genuinely disputed claims.