Debt Flowchart

If you can no longer pay your debts now or within a short time frame, you have several options to possibly get rid of your short-term and long-term debt. The 'Debt Flowchart' provides you with insight into these options, such as an amicable settlement, the Natural Persons Debt Rescheduling Act (Wsnp), the homologation private agreement in bankruptcy Act (WHOA), and bankruptcy. Which scheme suits your situation and what does this mean for you?

This flowchart is a simplification of reality. It offers you an overview of the different routes. Below the image we explain what the concepts and situations in the flowchart mean.

Problematic financial situation

Your financial situation is problematic if you are no longer able to meet your financial obligations in the short and long term. This situation is also known as insolvency.

Has someone else filed for your bankruptcy?

Has someone filed for your bankruptcy? You can defend against the bankruptcy petition. You must then demonstrate with a statement of defence that you have not stopped paying. In the notice of hearing, you find the term for delivering the statement of defence and the appendices. Has the judge declared you bankrupt, and you were not present at the hearing? Then take action quickly. You have 2 weeks to object after the day of the court decision. Were you present at the verdict, and did you not agree with the judge? Then you have 8 days to appeal.

Get help

In a problematic financial situation, you can get help from, for example, a bookkeeper, accountant, or lawyer. Or contact the Netherlands Chamber of Commerce KVK Advice Team for information, brief advice, or referral. The Ondernemersklankbord (Entrepreneur’s soundboard, in Dutch) can also advise and coach you.

What legal structure do you have?

In addition to your financial situation, the legal structure of your company also influences what possibilities are open to you for debt settlement. We distinguish 2 groups of legal forms:

  1. Natural personalities: Sole proprietorship, general partnership, limited partnership, partnership.
  2. Legal personalities: Private company, public limited company, association, cooperative and mutual insurance company, foundation.

Amicable settlement

In an amicable settlement you try to reach agreements with your creditors about repayment. This is done outside the court. You can then continue with your business. The agreements you make with your creditors are laid down in an amicable debt agreement. You pay back as much debt as possible within 36 months. If any debt remains after 36 months, it can be waived by the creditors. The amicable settlement is a voluntary arrangement. You can set up this amicable settlement yourself by making agreements with your creditor or through a debt counsellor. Based on the Municipal Debt Assistance Act (Wgs, in Dutch), municipalities are tasked with helping entrepreneurs that are a natural personality with their problematic debt situation. In other cases, you can do it yourself or engage a debt counselling organisation for entrepreneurs.

  • For whom: natural and legal personalities.
  • Costs: depends on the organisation (in Dutch) that helps you and whether you do it yourself.
  • What if the amicable settlement fails or is not possible? Then you can still apply for Wsnp or bankruptcy yourself.

Natural Persons Debt Rescheduling Act

The Natural Persons Debt Restructuring Act (Wsnp) is a statutory debt restructuring process to resolve your debts. The Wsnp is only for natural personalities. You ask the court in your place of residence for admission to the Wsnp. Conditions apply. For example, the municipality can help you with a statement showing that an amicable settlement has not been successful. Such a statement is a condition for admission to the Wsnp. If the judge admits you to the Wsnp, the court will draw up a plan to restructure your debts. This plan states the amount that you must repay. Usually, you must repay in 3 to 5 years. You will then be assigned an administrator. Often, the administrator will close down the (your) company. If you comply with all the obligations of the Wsnp, you will receive a clean slate from the court at the end of the agreed period. This means that you no longer have to pay any remaining debts.

  • For whom: natural personalities. Even if a creditor petitions for your bankruptcy, you can request the court to convert it to Wsnp.
  • Costs: the costs for an administrator are settled in your debt repayment plan. The final amount depends on the complexity of the case.
  • What if Wsnp fails? If you do not comply with the obligations of the Wsnp, the court can declare your bankruptcy.

Homologation private agreement in bankruptcy Act (WHOA)

The homologation private agreement in bankruptcy Act (WHOA) helps companies that are in danger of going bankrupt due to high debts. If bankruptcy is imminent, you can start this process yourself. Creditors, shareholders, employee representatives, or the works council can also do this. A WHOA process can take 5 to 6 weeks, but might also take several months. There are 2 types of WHOA agreements: a reorganisation agreement and a liquidation agreement.

Reorganisation agreement

If your company has prospect of a future, you can prevent bankruptcy with the WHOA. You consult with your creditors. The agreements you make with them are laid down in a draft agreement. Creditors and shareholders vote per creditor class on this draft agreement concerning the debt settlement plan. The court then confirms the agreement on the proposed debt settlement. This is called homologation of the agreement. This is binding, even if not all creditors or shareholders involved in the plan agree. You keep control of your company during the WHOA process and you can continue to do business. Within the WHOA, this is referred to as a reorganisation agreement.

If you start a WHOA procedure, you can ask the court for a cooling-off period. During this cooling-off period, the court may limit creditors' remedies, such as foreclosure, and may suspend pending bankruptcy petitions. The cooling-off period lasts 4 months and can be extended for another 4 months.

Liquidation agreement

If your company has no future prospects, you can use the WHOA to settle the finances of your company. The WHOA makes it possible to end your business in a controlled manner, while maintaining a say over your company. This way you can avoid major financial damage. This is called a liquidation agreement.

  • For whom: natural and legal personalities.
  • Costs: consultancy costs and legal costs for supervising a WHOA process. For a sole proprietorship, the total costs are estimated at approximately €8,000. For the other legal structures, they will amount to more than €10,000. Additional audit fees and costs for appraisal of your assets may be added to this.
  • What if WHOA fails? Then bankruptcy follows.


Bankruptcy is usually the last option. You can file for bankruptcy yourself at the court, but a creditor can also do this.

The judge will determine whether you have stopped paying your debts as an entrepreneur. During a hearing, the judge determines whether the bankruptcy petition is justified. You can defend yourself during the hearing. Once the bankruptcy has been declared by the court, you can no longer claim any form of debt restructuring.

In bankruptcy proceedings, the judge appoints a curator who takes over all decision-making and your financial affairs. Bankruptcy proceedings can take years. The curator makes a proposal to the creditors. Then there are 2 options:

  1. The creditors agree to the curator's proposal. This is called a bankruptcy agreement.
  2. The creditors or the court do not agree with the curator's proposal. The court then declares insolvency. This means that you cannot pay. The curator sells your assets to pay the creditors.

If you have too few assets to pay the costs for a bankruptcy curator and the administration of the bankruptcy, the bankruptcy ends. However, your debts remain. In the future, creditors can still apply for claiming debts.

  • For whom: natural and legal personalities.
  • Costs: you pay the curator with the money that is still available or comes from your company. For example, by selling your inventory and estate. Or by collecting outstanding bills. The court determines the curator's salary. The basic hourly rate (in Dutch) of a curator has been set at €226 on 1 January 2021.

Suspension of payment

Suspension of payment is not included in this flowchart, because the success rate of this scheme is highly limited. And usually, bankruptcy follows after this process fails. The WHOA is a better alternative.

You can ask the court for a suspension of payment. If the court grants this suspension, your creditors will not be able to claim their debts for a maximum period of 1.5 years. A judge appoints you an administrator. An administrator manages a your property and arranges all financial matters.

Not sure whether you should continue or end your business? Check out this article to help make your decision.