In debt? Your municipality can help you

The Municipal Debt Assistance Act (Wgs, in Dutch) regulates that anyone with debts can get help through the municipality. This also applies to entrepreneurs.

Municipal debt assistance also for entrepreneurs

Municipalities are responsible for providing debt advice. They are free to decide how to organise this. Some municipalities provide this service themselves. Others work in partnership with an organisation that specialises in debt advice for entrepreneurs. What is the same everywhere is that every entrepreneur is entitled to debt advice through their municipality. 

Are you an entrepreneur and in debt? Contact the municipality where you live. They will help you. The starting point is that you can keep your business if you want to, and if the business is viable.

Debt assistance from the municipality, what can you expect?

Each municipality organises debt assistance in its own way. But usually debt assistance for entrepreneurs looks like this:

1. An intake interview

After the initial contact by phone, email, or visit to the municipality, an intake interview follows. This is usually within 4 weeks. Is there an emergency situation? Then the interview follows within 3 working days.

During the meeting, you will discuss your situation. The focus is on your business, your debts, your personal circumstances, and how you are feeling. For example, are you experiencing stress, anxiety, or embarrassment? The municipality will work with you to assess the seriousness of the situation and determine what support is needed.

2. Plan of action

Following the initial assessment, the municipality will draw up a plan for you setting out the steps to be taken. The municipality may do this itself or commission a specialist organisation with expertise in debt counselling to do so. Even if the support is outsourced, the municipality remains responsible. There is regular communication between the municipality and the organisation providing your support. 

3. Working together towards solutions

During the follow-up process, you will work with your debt counsellor to find a suitable solution to your debts, taking steps that are appropriate to your situation. For example, you will draw up a list of creditors and the outstanding amounts, and determine which creditors have priority. You will also explore whether arrangements can be made with the landlord of your business premises or with suppliers.

You can also get help with updating your records. Sometimes your records are held by a bookkeeper or accountant because you could no longer afford to pay them. In that case, the debt counsellor will help you to obtain the correct information.

Possible arrangements for dealing with debts

Depending on your situation, there are various arrangements for dealing with debts:

• Amicable settlement: you make voluntary agreements with creditors yourself regarding the repayment of debts.
• Natural Persons Debt Restructuring Act (Wsnp): if agreements cannot be reached, you can enter a statutory debt restructuring process through the courts.
• Court Approval of a Private Composition (Prevention of Insolvency) Act (WHOA): this allows you to reach an agreement with creditors through the courts to avoid bankruptcy.

The right solution varies depending on the entrepreneur and the situation. The process is always tailored to individual needs.

No such thing as too early

Do not let arrears or debts grow further: there is no such thing as asking for help too early. The longer you wait, the bigger the problems often become. Entrepreneurs sometimes stop opening their post or wait until bankruptcy proceedings are initiated. If you seek help in good time, there are often more options available.

Seek help

Are you in arrears or in debt? If so, seek help. Contact the municipality where you live and inquire about debt assistance for entrepreneurs. Or put your question to the KVK Advice Team.