Discharge after bankruptcy, also for directors
Since the entry into force of Book XX of the Code of Economic Law on 1 May 2018, the regime of excusability has been replaced by the new statutory principle of discharge of residual debts.
This principle entails that the bankrupt natural person will be released from all residual debts towards creditors, except for debts related to security interests, maintenance contributions, and damages resulting from death or impairment of physical integrity.
A benefit enjoyed not only by natural persons trading in their own name (‘sole proprietorships’) but also by directors.
A director may indeed also be admitted to the bankruptcy regime if the Business Court rules that the director in question must be qualified as an entrepreneur. In this case-by-case assessment, the Business Court will examine the intention to professionally exercise the mandate of director and to generate income from it.
For the discharge, it is irrelevant whether the personal debts arose before the incorporation of the company or during the existence of the company.
(Former) spouses and (former) cohabiting partners can also jump on board and benefit from the discharge. With respect to these partners, however, the discharge is in principle limited to debts related to the professional activity of the bankrupt person and to debts incurred during the marriage or legal cohabitation.
A notable benefit, therefore, for the entrepreneur who can be released from all personal debts. A benefit that, of course, comes with a catch.
The discharge is namely only granted to the bankrupt person who has expressly requested it within 3 months of the publication of the bankruptcy judgment. If you let this deadline pass, your chance is permanently gone and no discharge will be granted to you.
This deadline is relatively short and over before you know it. It is therefore advisable to seek assistance if you wish to file for bankruptcy or are confronted with a summons for bankruptcy. A matter in which Alis Advocaten has particular expertise.
So be careful, haste and speed are indeed good in this matter!
