In debt? Your municipality can help you

Are you lying awake over unpaid bills or creditors knocking at your door? Every entrepreneur can face financial challenges. You are not the only one. Seek help, for example from the municipality. It has a legal duty to help residents in debt, including entrepreneurs. Read in this article what the municipality can do for 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. 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 for entrepreneurs

The Vereniging Nederlandse Gemeenten (Association of Netherlands Municipalities, VNG) supports municipalities in setting up debt assistance for entrepreneurs. Jenny Wildenbos (implementation manager at VNG) stresses: “Every municipality has the freedom to fulfil this legal task itself. This means that there are municipalities that provide debt assistance themselves. But there are also municipalities that outsource this to an external party specialised in debt assistance for entrepreneurs. Every entrepreneur is entitled to debt assistance from the municipality, that is certain."

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:

An intake interview

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

“The first conversation is an important moment”, says Hilda van der Weg, coordinator Geldzaken en ondernemers (money matters and business) at the municipality of Arnhem. "Together with the entrepreneur, I determine the seriousness of the situation. There is room for emotions like shame and stress. There is room for the whole story. Often entrepreneurs with debts are in a stressful situation where problems may also have arisen in the private situation. Sometimes they have rent or mortgage arrears. Or the entrepreneur's partner is still completely unaware of what is going on. Even then, we offer help and call in expertise where necessary."

Follow-up steps

After the intake interview, an outline plan of action is drawn up. The municipality can take up this process itself or outsource it to an external party. The municipality of Arnhem, for example, works with Zuidweg & Partners for the follow-up process. "I hand over my file and they keep me informed during the process. The municipality remains responsible for debt assistance to the entrepreneur, even when outsourcing”, Van der Weg explains.

Jacqueline Zuidweg, founder and manager director of Zuidweg & Partners, confirms the short lines of communication with the municipality. Zuidweg & Partners tailors its working method to the entrepreneur's situation. "It is tailor-made. Together we make a list of creditors and outstanding amounts. We examine which creditors have priority. And whether we can still talk to a landlord of the business premises”, says Zuidweg. "Sometimes the accounts are with a bookkeeper or accountant. They do not want to send documents or information because there are accounts that have not been paid. We then help to still gather all the information needed to get things in order."

Zuidweg & Partners also supports in setting up a voluntary payment arrangement where you make your own arrangements with creditors, this is called the amicable settlement. If this is not possible, the Natural Persons Debt Rescheduling Act (Wsnp) may offer a solution. This is a legal debt restructuring process to resolve debts for which you ask the court for admission. Besides the amicable settlement, the WHOA (Court Approval of a Private Composition (Prevention of Insolvency) Act) may be a way to avoid bankruptcy. In a WHOA procedure, you arrange an agreement through the court for a debt settlement with your creditors.

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, according to Zuidweg. "There are often situations where I think: you should have raised the alarm earlier. Then together we could have prevented debts from rising further." Van der Weg recognises this. She says: “The earlier entrepreneurs with debts come forward, the better. I often see that entrepreneurs with debts have problems that grow because they no longer open their mail, for example. Then the problems literally pile up. Or bankruptcy has already been filed when it was not necessary. At an earlier stage, more, less far-reaching solutions are often possible."

Zoek hulp

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.