Bankruptcy Act

TITLE III DEBT REPAYMENT SCHEME FOR NATURAL PERSONS

Chapter 7 Winding-up of the Liquidation Estate

Article 347 State of insolvency; realisation of assets of the liquidation estate
- 1. As soon as the judgment ordering the application of the Debt Repayment Scheme has been rendered by the court, the liquidation estate of the debtor shall enter, by operation of law, into a state of insolvency, and the administrator shall proceed to the winding-up and realization of its assets as far as the magistrate ('rechter-commissaris'') has not provided otherwise in this respect, without the need to have the consent or cooperation of the debtor for doing so.
- 2. The assets shall be sold by private sale unless the magistrate ('rechter-commissaris'') orders a public sale.
- 3. Article 176, paragraph 2, shall apply accordingly.

Article 348 Meeting with the creditors regarding the winding-up and verification of later submitted claims
Upon the request of the debtor, administrator or creditor or of his own motion (ex officio), the magistrate (''rechter-commissaris''') may convene a meeting with the creditors, to be set by him at a specific date, time and place, in order to consult them, where necessary, on the way in which the liquidation estate shall be wound-up and on other matters regarding the Debt Repayment Scheme, and, where necessary, to verify and admit claims which have been submitted (presented) when the period referred to in Article 289, paragraph 2 already had passed, and which were not yet verified and admitted in accordance with Article 127. In respect of these claims the administrator shall act in accordance with the provisions of Articles 111 up to and including 114. No less than ten days prior to this meeting the administrator will sent a letter to the creditors in which he calls them to the meeting, and in which the subjects that will be considered (discussed) at that meeting are set out, reminding them also of Article 114.

Article 349 Distributions made from the liquidation estate
- 1. Whenever there is sufficient cash available to make a distribution, the magistrate ('rechter-commissaris'') shall order that such distribution is to be made to the admitted creditors. Yet, no distribution shall be made if an asset still has to be sold that is encumbered with a pledge or mortgage or to which a priority ranking (right of preference) is attached as meant in Article 292 of Book 3 of the Civil Code or to which a privilege is attached. If an asset as referred to in the preceding sentence shall enter into the liquidation estate after a distribution is made, this will not affect the validity of such distribution.
- 2. The distributions shall be made pro rata to the value of each creditor's claim, provided that, as long as claims subject to a priority ranking (right of preference) have not been satisfied in full, the percentage paid thereon shall be twice that payable on non-preferential claims.
- 3. For the purpose of paragraph 2, claims of creditors with a priority ranking (right of preference), whether or not this is contested, which have not already been satisfied in accordance with Article 57 or 299b, paragraph 3, shall be fixed at the amount for which they may be credited on verification on the proceeds of the property to which the priority ranking (right of preference) relates. If this is less than the entire amount of their claims, they shall be treated as non-preferential creditors in respect of any shortfall.
- 4. The administrator shall draw up a distribution list from time to time. The list shall include a statement of receipts and expenditures, the names of the creditors, the admitted amount of each creditor's claim and the distributions to be received thereon.
- 5. Articles 181, 182 - in which Article 60, paragraph 3, second sentence, should be read as Article 299b, paragraph 3, second sentence -, 183 up to and inclusive 189, 191 and 192 shall apply accordingly.

Chapter 8 Duration and ending of the Application of a Debt Repayment Scheme

Article 349a Duration of the application of the Debt Repayment Scheme
- 1. The application of the Debt Repayment Scheme will last for a period of three years, to be calculated as of the day on which the judgment ordering the application of the Debt Repayment Scheme was rendered, including that day. In derogation from the preceding sentence, the court may set the before meant period to at the most five years if for the entire period also a nominal amount is fixed as meant in Article 295, paragraph 3.
- 2. Upon the request of the administrator, the debtor or one or more creditors or of his own motion (ex officio), the magistrate ('rechter-commissaris'') may, by written order, change the period referred to in paragraph 1. The period shall at the most be five years. The administrator shall, without delay, give notice of the changed period to the creditors. The magistrate ('rechter-commissaris'') must grant the debtor the opportunity to be heard before a decision on the extension of the period is taken.
- 3. On the same conditions the District Court may, within the framework of Article 350 or 352, change the period meant in the previous paragraphs, upon a proposal of the magistrate ('rechter-commissaris'') or upon the request of the administrator, debtor or one or more creditors. The debtor as well as the creditors who have requested for a change of the involved period may lodge an appeal against such judgment during eight days after the day of that judicial decision. Article 351, paragraph 2 up to and including 5, shall apply.

Article 350 Termination of the application of the Debt Repayment Scheme by the court
- 1. Upon a proposal of the magistrate ('rechter-commissaris'') or upon the request of the administrator, the debtor or one or more creditors, the District Court may terminate the application of a Debt Repayment Scheme. It may also do so of its own motion (ex officio).
- 2. Prior to its decision the District Court shall call the debtor to court in order to hear him. It may also call creditors for such purpose.
- 3. A termination as referred to in paragraph 1 may be ordered if:
a. the claims to which the Debt Repayment Scheme applies have been satisfied;
b. the debtor is in a position to resume (restart) his payments;
c. the debtor does not properly perform one or more obligations arising from the Debt Repayment Scheme;
d. the debtor causes or tolerates excessive debts to be incurred;
e. the debtor tries to harm (prejudice) his creditors;
f. facts and circumstances have become known that existed already on the day on which the petition for an order for the application of the Debt Repayment Scheme was lodged, and that would produce a ground to reject that petition in accordance with Article 288, paragraph 1 and 2;
g. the debtor makes plausible that he is not able to comply with the obligations arsing from the Debt Repayment Scheme.
- 4. The decision shall be given in the form of a judgment. In the instances meant in paragraph 3, under (a) and (b), and when no assets at all are present from which a distribution can be made, no verification of claims and no drawing up of a distribution list will take place, and the Debt Repayment Scheme shall end when the judgment to terminate it has become final and binding,
- 5. If termination is ordered on account of the provisions in paragraph 3, under (c) up to and including (g), and assets are available from which claims may be paid in full or in part, the debtor shall by operation of law enter into a state of bankruptcy as soon as the judgment to terminate the Debt Repayment Scheme has become final and binding. The District Court shall immediately appoint a magistrate in bankruptcy ('rechter-commissaris'') and a bankruptcy liquidator ('curator').
- 6. The administrator, or where paragraph 5 is applicable, the bankruptcy liquidator shall ensure publication of the ending of the Debt Repayment Scheme in the Government Gazette.

Article 351 Appeal and appeal in cassation
- 1. In the event that the District Court has terminated the application of the Debt Repayment Scheme, the debtor has the right to make an appeal against this decision during eight days after it was rendered; in the event that the court has refused to terminate the application of the Debt Repayment Scheme, the person who has lodged a petition for such termination has the right to make an appeal against that decision during eight days after it was rendered.
- 2. An appeal meant in the preceding paragraph shall be made by submitting a petition to the office of the clerk of the Court of Appeal which must hear the matter. The clerk of the Court of Appeal shall, without delay, inform the clerk of the District Court of the lodged appeal.
- 3. The presiding judge of the Court of Appeal shall at once set the date and time of the hearing, which must take place within twenty days after the day on which the petition for appeal was lodged.
- 4. The Court of Appeal shall give its decision no later than on the eight day after the hearing where the petition for appeal has been dealt with. The clerk of the Court of Appeal shall, without delay, inform the clerk of the District Court of the decision of the Court of Appeal.
- 5. The party who has been put in the wrong by the Court of Appeal has the right to make an appeal in cassation against that judgment during eight days after it was rendered. Such an appeal in cassation must be made by submitting a petition to the office of the clerk of the Supreme Court. The clerk of the Supreme Court shall, without delay, inform the clerk of the District Court of the lodged appeal in cassation and of the decree (decision) of the Supreme Court.

Article 351a Account made by the administrator on how the debtor has complied with his obligations
No later than three months before the period referred to in Article 349a expires, the administrator shall give an account to the magistrate ('rechter-commissaris'') of the way in which the debtor has complied with his obligations during the application of the Debt Repayment Scheme.

Article 352 Setting a hearing on the termination of the Debt Repayment Scheme
- 1. If the application of the Debt Repayment Scheme has not already ended, the District Court shall, upon a proposal of the magistrate ('rechter-commissaris'') or upon the request of the administrator or debtor or of its own motion (ex officio), set the day, hour and place for the hearing where the termination of the application of the Debt Repayment Scheme shall be dealt with; the court order in which the District Court sets the before meant day, hour and place must be rendered no later than one month before the period referred to in Article 349a expires.
- 2. The hearing shall be held not earlier than fourteen days and not later than twenty-one days after the court order of the District Court.
- 3. Without delay the administrator shall ensure publication of the date, hour and place of the court hearing in the Government Gazette.

Article 353 The hearing
- 1. The administrator and debtor may be called in writing to the court for the hearing which is set pursuant to Article 352. The debtor and administrator are called to that hearing when there is doubt whether the debtor has failed to comply with one or more his obligations arisen from the Debt Repayment Scheme and whether this is attributable to him.
- 2. The District Court may provide each appeared creditor the opportunity to speak at the hearing, either in person or through a representative authorized by written procuration (power of attorney) or through an advocate (solicitor admitted to the Bar).

Article 354 Decision of the District Court
- 1. On the day of the hearing or otherwise no later than on the eight thereafter, the District Court shall give its decision in the form of a judgment on the question whether the debtor has failed to comply with one or more his obligations arisen from the Debt Repayment Scheme and, if there is such failure, whether it is attributable to him.
- 2. In the event of an attributable failure, the District Court may determine that, in view of its particular nature or insignificance, such failure shall not be taken into account.

Article 354a District COurts sets a day for the hearing on termination of the Debt Repayment Scheme
- 1. When at least one year has passed since the court order for the application of the Debt Repayment Scheme was rendered and thus far no day for a verification meeting has been set, the District Court may, upon a proposal of the magistrate ('rechter-commissaris'') or upon the request of the administrator or debtor, set a day for the hearing where the termination of the Dept Repayment Scheme shall be dealt with. The District Court shall only set such hearing when the proposal or request is attended with a reasoned statement of the administrator about the question whether it is reasonably not to be expected that the debtor may in such way comply with is obligations that a continuation of the Debt Repayment Scheme is justified. The magistrate ('rechter-commissaris'') may instruct the administrator to put this statement in writing and to send it to the District Court and the parties concerned.
- 2. The District Court shall terminate the Debt Repayment Scheme only if it is reasonably not to be expected that the debtor is able to comply with his obligations in such a way that a continuation of the Debt Repayment Scheme is justified, and no circumstances as meant in Article 350, paragraph 2, under (c) up to and including (g) have appeared to be present.
- 3. The District Court may one or more times stay its decision in order to conduct further investigations.
- 4. Without delay the administrator shall ensure publication of the date, hour and place in the Government Gazette.

Article 355 Appeal to be made by the creditors and debtor
- 1. The creditors and debtor may lodge an appeal against the judgment meant in Article 354 and 354a within eight days after the date of that judgment.
- 2. Article 351, paragraph 2 up to and including 5, is applicable.

Article 356 Drawing up final distribution list; termination of the Debt Repayment Scheme
- 1. As soon as a decision referred to in Article 354 has become final and binding the administrator shall, without delay, proceed to the drawing up of a final distribution list. No final distribution list shall be drawn up if the District Court has terminated the Debt Repayment Scheme on the basis of Article 354a.
- 2. The application of a Debt Repayment Scheme is terminated by operation of law as soon as the final distribution list has become binding or, if the District Court has terminated the application of the Debt Repayment Scheme on the basis of Article 354a, as soon as the judicial decision for termination has become final and binding . The administrator shall ensure publication thereof in the Government Gazette.
- 3. Upon expiry of one month after termination the administrator shall render account of his administration to the magistrate ('rechter-commissaris'').
- 4. Article 194 is applicable.

Article 357 [repealed on 01-01-2008]

Article 358 Enforceability of claims after the ending of the Debt Repayment Scheme
- 1. Where the application of a Debt Repayment Scheme has been terminated on the basis of Article 356, paragraph 2, a claim to which the Debt Repayment Scheme applies shall, insofar as this has not been satisfied, no longer be enforceable, irrespective of whether or not the creditor submitted (presented) his claim in the Debt Repayment Scheme and whether or not the claim was admitted.
- 2. Paragraph 1 shall not apply if, in the judgment referred to in Article 354, the court has established that there was a failure attributable to the debtor and the court did not proceed to the application of Article 354, paragraph 2.
- 3. Paragraph 1 applies as well to estate debts*) meant in Article 15d, paragraph 1, under (b) insofar these debts cannot be recovered from the liquidation estate of the Debt Repayment Scheme.
- 4. Without prejudice to Article 288, paragraph 2, under (c), paragraph 1 shall not be applicable in the event of the termination of the Debt Repayment Scheme with regard to claims resulting from a final and binding penal conviction:
a. to pay a fine as meant in Article 9, first paragraph, under (4), of the Penal Code;
b. to pay a sum of money to deprive the debtor of a benefit which he acquired unlawfully as referred to in Article 36e of the Penal Code;
c. to pay a sum of money on behalf of a victim as meant in Article 36f of the Penal Code;
d. to pay compensatory damages to an injured (harmed) party as referred to in Article 51a of the Penal Code.
For the purpose of the present paragraph a claim shall include a claim resulting from a final and binding judgment in which the debtor is ordered to pay damages that has been rendered by the civil court after the criminal court, that has ruled on the criminal offence, had established that only the civil court has jurisdiction over the claim for the payment of damages of a part thereof.
- 5. Paragraph 1 is not applicable with regard to a claim for which a mortgage serves as security that is taken out on registered property where the debtor resides if Article 303, paragraph 3, applies to the interest accrued on this claim.
- 6. Paragraph 1 is not applicable when the debtor has deceased during the application of the Debt Repayment Scheme.

*) Estate debts are debts which are made by or with the consent of the administrator for account of the liquidation estate; the involved creditor has a preferential claim (estate claim) that must be satisfied first from the assets of the liquidation estate.

Chapter 9 Special Provisions

Article 358a New facts have appeared after termination of the Debt Repayment Scheme
- 1. If, after termination of the application of the Debt Repayment Scheme as a result of which the legal effect referred to in Article 358, paragraph 1 became operative, there appear to have been facts or circumstances which already had occurred before such time and which would have given grounds for termination of the application of the Debt Repayment Scheme on the basis of Article 350, paragraph3, under (e), the District Court may, upon the request of any interested party, determine that Article 358, paragraph 1, shall no longer apply.
- 2. Prior to its decision the District Court shall call the debtor to court in order to be heard.
- 3. An Appeal may be lodged against the judgment meant in the preceding paragraphs within eight days after it was rendered. Such an appeal shall be made by submitting a petition to the clerk's office of the Court of Appeal which must be seized of the matter.
- 4. Within eight days after the judgment of the Court of Appeal, an appeal in cassation may be lodged. Such an appeal in cassation must be made by submitting a petition to the clerk's office of the Supreme Court.
- 5. As soon as the decision referred to in the paragraph 1 has become final and binding, the clerk of the judicial body that gave this decision shall, without delay, publish it in the Government Gazette.

Article 359 Application of Articles when the debtor has been declared bankrupt
- 1. If the debtor is declared bankrupt during the application of the Debt Repayment Scheme or if the debtor has become bankrupt in consequence of Article 350, paragraph 5, then the following rules shall apply:
a. acts performed by the administrator during the application of the Debt Repayment Scheme shall remain valid and binding;
b. estate debts*) which arose during the application of the Debt Repayment Scheme shall be regarded as debts of the liquidation estate in bankruptcy;
c. new debts arisen during the application of the Debt Repayment Scheme, not being estate debts*), shall be regarded in the bankruptcy as admittable debts;
d. claims submitted in the Debt Repayment Scheme shall be regarded as to have been submitted in the bankruptcy;
e. interest claims as meant in Article 303 must be submitted after all.
- 2. The liquidator ('curator') shall exercise the powers conferred on the administrator in Article 297, paragraph 3.
- 3. The start of the time periods mentioned in Articles 43 and 45 shall be calculated with effect from the date of the decision to apply the Debt Repayment Scheme.

*) Estate debts are debts which are made by or with the consent of the administrator for account of the liquidation estate; the involved creditor has a preferential claim (estate claim) that must be satisfied first from the assets of the liquidation estate.

Article 359a Application of other Articles
Articles 203 up to and including 205 shall apply accordingly

Chapter 10 Final Provisions

Article 360 No appeal or other legal remedy available unless provided otherwise
No appeal or other legal remedy is available against decisions of the court given pursuant to the provisions of the present Title (Title III), except as otherwise provided and save for the possibility of an appeal in cassation in the interest of the law.

Article 361 Lodged petition must be signed by an advocate or administrator
- 1. Petitions made on the basis of Articles 292, paragraph 1 and 3, 315, paragraph 1, 348, 349a, paragraph 2, 350, paragraph 1, 351, paragraph 1, 355, paragraph 1 and 358a, paragraph 1 must be signed by an advocate (solicitor admitted to the Bar), except when a request is made by the administrator or in the case of a request by the debtor pursuant to Article 350, paragraph 1.
- 2. Petitions made on the basis of Article 33 of the European Regulation meant in Article 5, paragraph 3, must be signed by an advocate (solicitor admitted to the Bar).
- 3. In order to lodge an appeal in cassation the assistance of an advocate (solicitor admitted to the Bar) accredited to the Supreme Court shall be required.

Article 362 No applicability of the General Computation of Time Periods Act
- 1. The General Computation of Time Periods Act (Algemene Termijnenwet) is not applicable to the time limits laid down in Articles 39, 40, 238, 239 and 305.
- 2. Title 3 of Book 1 of the Code of Civil Procedure shall not apply to petitions (applications) made on the basis of the present Act.