Debt restructuring: often you have to end your business

If you have problematic debts, you can make use of the Natural Persons Debt Restructuring Act (Wet schuldsanering natuurlijke personen, WSNP). Debts are problematic when you can no longer pay your business and private bills. Debt collectors must also threaten to seize your house or property or file for bankruptcy.

How can I access the WSNP work

Before you apply to a court for access to the WSNP, you must first follow the procedure for an amicable settlement. During this process, you will receive help from your municipality in making payment arrangements with creditors. If this course of action fails, the judge can grant you access to the WSNP.

The judge will appoint an administrator (bewindvoerder, in Dutch). They manage your income, pay you money to live on, and make agreements on payments with creditors. Do you follow the rules and the process goes well? Then after 18 months of WSNP, you no longer have any debts. This is an important difference from personal bankruptcy. In that case, creditors can claim their money even after the bankruptcy is closed.

Consequences of the WSNP per legal structure

You can only apply for access to WSNP if you are personally responsible for the debts. This applies to an eenmanszaak (sole proprietorship), VOF (general partnership), maatschap (professional partnership), or CV (limited partnership).

If you are a shareholder of a BV (private limited company) or a director of a vereniging (association), cooperatie (cooperative), or stichting (foundation), you are usually not personally responsible for debts of those organisations. Then you cannot use debt restructuring for those debts.

Read about the consequences of debt restructuring for your legal structure.

WSNP and eenmanszaak

If you enter the WSNP due to private debts or debts in your eenmanszaak, the court will usually decide that you must end your business. Sometimes you are still allowed to continue. For example if you still have income coming in from your business with which you can pay off debts. Does the judge order you to stop? Then you have to pay off as many debts as possible in another way, such as with income from paid employment.

WSNP and VOF, maatschap or CV

Are you a partner? Then you are personally responsible for the debts of the partnership. If you are in a debt restructuring process, you usually have to stop as a partner. This is why each partner can apply for WSNP themselves. Also if you have problematic private debts.

Are you admitted to the WSNP? Then you usually have to stop as a partner. At that moment the VOF, maatschap or CV automatically ends as well. Unless other agreements were made about this at the start of the business. If only one partner or associate remains, the partnership always ends.

Sometimes the court allows you to remain a partner. Then the partnership also continues. The administrator must then give permission for every decision you make as a partner. For example, if the VOF, maatschap or CV starts a new assignment.

WSNP and BV

Do you enter the WSNP due to personal debts? Then you may lose your BV. This is because shares of your BV are private property. The administrator may sell these shares to repay your debts. If you are also a director of the BV, the new owners will decide if you can stay on.

Because a BV has its own legal personality, you are not privately liable for debts of the business. This is true for shareholders and usually also for directors. But if directors do not handle their responsibilities properly, they can be personally liable. The BV is not responsible for private debts.

WSNP and vereniging, cooperatie, or stichting

Are you a director of a vereniging, cooperatie, or stichting?  And do you enter the WSNP? Then you may remain a director, unless the articles of association state that a director may not be in a debt restructuring process. Articles of association are the rules of a vereniging, cooperatie, or stichting.

These legal structures are not responsible for your private debts. Does the vereniging, cooperatie, or stichting have problematic debts or does it go bankrupt? Then it will not affect you personally. However, if directors do not handle their responsibilities properly, they may be held personally liable.