Belgium: Restructuring & Insolvency (3rd edition)

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This country-specific Q&A provides an overview to restructuring and insolvency laws and regulations that may occur in Belgium.

This Q&A is part of the global guide to Restructuring & Insolvency (3rd edition). For a full list of jurisdictional Q&As visit

  1. What forms of security can be granted over immovable and movable property? What formalities are required and what is the impact if such formalities are not complied with?

    - Security over immoveable property

    In Belgium, a security interest over real estate is created by way of a mortgage. A mortgage can cover ownership of real property, e.g. land, buildings and constructions, including bare ownership rights freehold interests as well as other real property rights, such as long term lease rights. A mortgage needs to be established by notarial deed and registered (the timing of the registration determines the ranking). The cost of the mortgage amount to approximately 1.30% of the mortgage amount to be increased with notary fees and costs. To reduce costs the mortgage can be taken for a lower amount in combination with a mortgage mandate for the remaining portion of the secured claim. A mortgage mandate is an irrevocable mandate to establish a mortgage, in addition to the existing mortgage. While it reduces the cost, it will only create effective security from the moment it is converted into a regular mortgage and properly registered at which time also the registration fee will be due.

    - Security over movable property

    The right of pledge gives the pledgee the right to be paid in priority over the other creditors from the encumbered goods. Most common pledges are pledges on the business, shares, IP, bank account and receivables. The right of pledge is opposable to third parties through a registration in the national pledge register ( Such registration triggers a registration fee of up to 500€ and is valid for ten years.

    Retention of title refers to the sale of movable property with a clause that suspends the transfer of ownership to the buyer until full payment of the price is made. The movable property can be reclaimed if the buyer fails to pay the purchase price insofar as it is agreed in writing at or prior to the time of delivery of the good. Under the new insolvency law, holders of retention of tile will benefit from a super priority therefore prevailing over any pledgee or assignee of the same receivables. The retention of title clause is not subject to any requirement of registration or publication, but if registered in the national pledge register, the retention of title will continue to apply to assets sold by the debtor even if they became immovable by incorporation in real estate.

  2. What practical issues do secured creditors face in enforcing their security (e.g. timing issues, requirement for court involvement)?

    - Mortgage

    Under Belgian law, a mortgage over real estate is enforced by a sale of the secured property. In order to enforce the mortgage, the mortgagee will need to have an executable title, i.e. enforceable court decision or notarised deed. The sale of the property needs to occur via a public auction under the supervision of a court appointed notary which makes the procedure rather onerous and lengthy.

    - Financial collateral

    Provided the security is properly constituted, there is no notification requirement or prior authorisation of a court procedure for the enforcement of a pledge over financial collateral.

    - Share pledge

    Pursuant to the new company code, the articles of association of a private limited liability company (BV/SRL) may provide for the free transfer of shares doing away with the old requirement of amending the articles of the pledgor before grating the share pledge.

    - Right of pledge

    The pledgee is entitled, in the event of non-payment, to enforce its security by selling or renting the pledged goods in whole or in part in order to settle the claim. The execution must be carried out in good faith and in an economically responsible manner. The pledgee cannot limit or exclude his liability in this regard. The parties can agree on the execution method at the conclusion of the pledge agreement or at a later date.

    If the pledgee is in default, the pledgee is entitled to set off a debt comparison with the guaranteed claim and he must refund the balance to the pledgee.

    - Pledged claims

    Unless otherwise agreed, the pledgee is authorized to demand compliance with the pledged claim, both in and out of court. The pledgee can thereby exercise all ancillary rights of the claim. The pledgee settles the amounts collected on the guaranteed claim when it is due and pays the balance to the pledger.

    - Retention of title

    The transfer of ownership will only take place after the full purchase price has been paid. The secured creditor remains therefor the owner.

  3. What is the test for insolvency? Is there any obligation on directors or officers of the debtor to open insolvency procedures upon the debtor becoming distressed or insolvent? Are there any consequences for failure to do so?

    The enterprise that consistently ceased to pay its debts when they are due and that has lost the confidence of its creditors is in a state of bankruptcy. Both conditions need to be met simultaneously.

    The new insolvency law has drastically expanded the scope of insolvency legislation and now applies to any ‘enterprises’ which includes (i) any individual who independently exercises a professional activity, (ii) any legal entity and (iii) any organisation without legal personality.

    The debtor is obliged, within one month after it is in a state of bankruptcy, to file for bankruptcy at the territorially competent Enterprise Court. The declaration should be made electronically in the Central Solvency Register (REGSOL) via unless the debtor is not in the possibility to file for bankruptcy. In this exceptional situation, the debtor is allowed to file for bankruptcy at the clerk’s office of the competent Enterprise Court. Failure to do so may lead to civil and criminal liability of the directors.

  4. What insolvency procedures are available in the jurisdiction? Does management continue to operate the business and / or is the debtor subject to supervision? What roles do the court and other stakeholders play? How long does the process usually take to complete?

    Under Belgian law, the main insolvency procedures are bankruptcy and judicial reorganization.

    The bankruptcy procedure seeks to place the debtor's assets under the authority of a bankruptcy trustee who is responsible for managing and liquidating the bankrupt's assets and distributing the proceeds to the creditors. With the intention to liquidate the assets as profitable as possible, the bankruptcy trustee can opt to continue the business for a limited amount of time with the persons he sees fit. Management/the board of the debtor cease to have any authority by law as of the date of the bankruptcy decision. The bankruptcy trustee must report to the judge-commissioner, but has otherwise broad powers to realize the assets. A bankruptcy procedure typically last 1 – 3 years.

    The procedure of judicial reorganization is aimed at maintaining, under the supervision of the judge, the continuity of (or part of) the activities of a company. It allows the debtor to request a suspension period for a period up to six months (which is renewable up to 12 months and in exceptional circumstances up to 18 months). During this period, the company in distress has 3 different restructuring routes: (i) judicial reorganization by way of amicable agreement, (ii) judicial reorganization by way of collective agreement and (iii) judicial reorganization by way of transfer under judicial authority. Management continues to operate the business in order to implement the judicial reorganization under the supervision of the court.

  5. How do creditors and other stakeholders rank on an insolvency of a debtor? Do any stakeholders enjoy particular priority (e.g. employees, pension liabilities)? Could the claims of any class of creditor be subordinated (e.g. equitable subordination)?

    There are 3 categories of creditors in the bankrupt estate (in order of priority): (a) the specific preferred creditors who have a privilege or security interest that gives them rights to particular assets (e.g. holders of a mortgage or a pledge), (b) the general preferred creditors (such as the tax authorities, social security authorities and employees); and (c) the non-privileged creditors. If the proceeds of enforcement of the sale of the secured assets proves to be insufficient to repay the claim of the specific preferred creditors, then these creditors become unsecured creditors in respect of the balance of their claim. Unsecured creditors will then rank behind the general preferred creditors.

    Belgian legislation does not recognise the concept of equitable subordination. Belgian courts may, however, apply subordination as a sanction, e.g. to sanction a lender for having granted credit to and maintained a credit line for a company which is not creditworthy.

  6. Can a debtor’s pre-insolvency transactions be challenged? If so, by whom, when and on what grounds? What is the effect of a successful challenge and how are the rights of third parties impacted?

    The bankruptcy trustee can challenge any fraudulent transactions made to the detriment of the creditors regardless of when they occurred (actio pauliana).

    The bankruptcy trustee can also challenge the following acts if they were entered into during the so-called the ‘suspect’ or ‘hardening’ period, being the period from when the enterprise ceases to pay its debts until the time when the court declares the enterprise bankrupt. Typically both dates will coincide, but the court can, at the request of the bankruptcy trustee, declare that the enterprise ceased to pay its debt before the date of the bankruptcy, with a maximum of six months in which case the following acts be challenged if they took place in the suspect period:

    • gifts or transactions at no or at undervalue;
    • all payments, in cash or kind, of undue debts;
    • granting of security in respect of pre-existing indebtedness
  7. What form of stay or moratorium applies in insolvency proceedings against the continuation of legal proceedings or the enforcement of creditors’ claims? Does that stay or moratorium have extraterritorial effect? In what circumstances may creditors benefit from any exceptions to such stay or moratorium?

    Legal proceedings

    All proceedings pending on the date of the bankruptcy, in which the bankrupt party is involved, are legally suspended until the declaration of claim has been made by the claimant. If the submitted claim is accepted by the bankruptcy trustee in his first official report, the aforementioned pending proceeding will become void. However, if the submitted claim is disputed in the first official report, the bankruptcy trustee is presumed to resume the pending proceedings at least for the resolution of the disputed part.

    Enforcement of creditor’s claims

    The bankruptcy order will suspend the enforcement rights of the creditors except of for certain creditors with privileges on certain movable or immovable assets.

  8. What restructuring and rescue procedures are available in the jurisdiction, what are the entry requirements and how is a restructuring plan approved and implemented? Does management continue to operate the business and / or is the debtor subject to supervision? What roles do the court and other stakeholders play?

    Amicable settlement

    Any debtor can enter into an out of court settlement with two or more creditors. While not opposable to third parties, if the security granted thereunder is registered in the solvency register, such security will be enforceable even if constituted during the suspect period.

    Judicial reorganization

    In contrast to a bankruptcy or voluntary liquidation, the judicial reorganization is aimed at maintaining the continuity of (or part of) the activities of a company under the supervision of the court. It allows the debtor whose continuity is threatened to request a moratorium for a period up to six months which prevents in principle any enforcement against the debtor’s assets or the start of any bankruptcy proceedings. Judicial amicable settlements must be approved and declared enforceable by the court.

    The company in distress has 3 different restructuring options: (i) judicial reorganization by way of amicable agreement (same as above but now under court supervision), (ii) judicial reorganization by way of collective agreement or (iii) judicial reorganization by way of transfer under judicial authority.

    In case of a judicial reorganisation by way of collective agreement the company must prepare a reorganization plan involving a description of the restructuring and a description of each creditor's rights following such restructuring. The plan must provide for payment of at least 20% of each debt to each creditor. The reorganization plan is submitted to a vote at a meeting of creditors and is approved if the majority of creditors attending the meeting and the majority in value of the total claims vote in favour. After approval of the plan by the creditors, this plan must be ratified by the court. The court can refuse to ratify the plan only if the provisions of the law were not respected or if the plan violates public policy. A court can also allow the company to submit an adjusted reorganization plan to the creditors.

    The transfer of all or part of the business can be ordered by the court upon request of the company or upon request of the public prosecutor or other interested parties under certain conditions. The court will appoint a judicial administrator to organize the transfer in the name of and for the account of the company. The administrator acts under the supervision of the appointed judge. He will draft one or more sales agreements to present to the delegate judge and the court.

    Management continues to operate the business in order to implement the judicial reorganization under the supervision of the court.

    Notable change in the new insolvency law is that tax and social security debts incurred during the suspension period in the judicial reorganization are considered debts of the bankrupt estate in a subsequent insolvency procedure.

  9. Can a debtor in restructuring proceedings obtain new financing and are any special priorities afforded to such financing (if available)?

    A debtor in judicial reorganization can obtain new financing and, to the extent that this new financing covers activity performed during the procedure of judicial reorganization, they can be considered as direct debts of the bankrupt estate in a subsequent liquidation or bankruptcy insofar as there is a close link between the termination of the judicial reorganization procedure and the subsequent bankruptcy procedure. The lender may in such case enjoy a super privileged character in a subsequent bankruptcy.

  10. Can a restructuring proceeding release claims against non-debtor parties (e.g. guarantees granted by parent entities, claims against directors of the debtor), and, if so, in what circumstances?

    No, with the exception of claims against non-debtor parties that are natural persons who provided guarantees free of charge for the benefit of the debtor and provided such guarantees related to the professional activity of the debtor.

  11. Is it common for creditor committees to be formed in restructuring proceedings and what powers or responsibilities to they have? Are they permitted to retain advisers and, if so, how are they funded?

    The concept of creditor committees in restructuring proceedings does not exist under Belgian law.

  12. How are existing contracts treated in restructuring and insolvency processes? Are the parties obliged to continue to perform their obligations? Will termination, retention of title and set-off provisions in these contracts remain enforceable? Is there any ability for either party to disclaim the contract?

    Restructuring processes

    Notwithstanding contractual provisions to the contrary, the application for a judicial reorganization procedure does not terminate current contracts or the modalities thereof. However, the debtor may unilaterally decide to suspend the performance of its contractual obligations for the duration of the suspension period with a notice to the co-contracting party, if so required for the reorganization of the enterprise. The right of the debtor to unilaterally suspend the performance of his contractual obligations does not apply to employment contracts. The judicial organization does not have an impact on retention of title. Limitations may apply to set-off provisions.


    The bankruptcy does not automatically terminate existing agreements. After his appointment, the bankruptcy trustee will have to decide whether or not to further perform the agreements concluded before the date of the bankruptcy decision. The bankruptcy trustee may unilaterally terminate agreements when the management of the bankrupt estate requires this. Set-off after opening of the bankruptcy procedure is in principle prohibited and only allowed in very limited circumstances (i.e. where both debts are closely connected).

  13. What conditions apply to the sale of assets / the entire business in a restructuring or insolvency process? Does the purchaser acquire the assets “free and clear” of claims and liabilities? Can security be released without creditor consent? Is credit bidding permitted? Are pre-packaged sales possible?


    The judicial reorganization procedure foresees the possibility to transfer all or part of the business under the supervision of the Court. All creditors, and especially creditors that hold securities, are involved in the procedure but the Court has the final say. By selling the movable or immovable property, the rights of the creditors are transferred to the received price. The purchaser will acquire the assets free and clear of any rights (unless the reorganization plan provides otherwise). Pre-packaged sales are not possible.


    The bankruptcy trustee has the duty to realize all assets as fast as possible under supervision of the Enterprise Court. The assets are sold free and clear of any liens or rights. Creditors may object to an intended sale. Pre-packaged sales are not possible.

  14. What duties and liabilities should directors and officers be mindful of when managing a distressed debtor? What are the consequences of breach of duty? Is there any scope for other parties (e.g. director, partner, shareholder, lender) to incur liability for the debts of an insolvent debtor?

    A debtor is obliged to file for bankruptcy within one month after the conditions for bankruptcy have been met. Failure to do so may trigger civil and/or criminal liabilities for directors of the debtor.

    The new insolvency law introduced the concept of wrongful trading. If in the event of the bankruptcy of an enterprise, the debts exceed the proceeds, the current or former directors, managers, day-to-day directors, as well as all other persons who actually have had management authority, can be held personally and jointly liable for all or part of the debts of the bankrupt if such person involved knew or should have known that there was apparently no reasonable prospect of maintaining the enterprise or its activities and of avoiding bankruptcy and did not take the reasonably required actions.

    Directors can under certain circumstances also be held jointly liable for not paying social security contributions, tax or VAT by the relevant administration.

    The founders of a private limited liability company (BVBA/SPRL) can be held liable if the debtor goes bankrupt within 3 years from its incorporation and if it appears the financial plan to be provided at the time of incorporation shows a manifest underfunding of the company from the start. Pursuant to the new company code, a more detailed financial plan will be required for limited liability companies incorporated as of 1 May 2019.

    The new company code also introduces a liability cap for directors. The liability of directors will be capped at EUR 250,000, EUR 1,000,000, EUR 3,000,000, or EUR 12,000,000 depending on the revenue and assets of the company. The cap will not apply in the event of fraud, gross negligence, or repetitive minor misconduct or in relation to the abovementioned liability for unpaid social security, tax or VAT.

  15. Do restructuring or insolvency proceedings have the effect of releasing directors and other stakeholders from liability for previous actions and decisions?

    Restructuring and insolvency proceedings do not release directors and other stakeholders from liability for previous actions and decisions. Both the bankruptcy trustee as well creditors and tax authorities can initiate liability proceedings.

  16. Will a local court recognise concurrent foreign restructuring or insolvency proceedings over a local debtor? What is the process and test for achieving such recognition? Has the UNCITRAL Model Law on Cross Border Insolvency or the UNCITRAL Model Law on Recognition and Enforcement of Insolvency-Related Judgments been adopted or is it under consideration in your country?

    Pursuant to Regulation (EC) 2015/848 of 20 May 2015 on insolvency proceedings, the courts of the Member State within the territory of which the centre of the debtor's main interests (“COMI”) is situated shall have jurisdiction to open insolvency proceedings (‘main insolvency proceedings’).

    Where the COMI is situated within the territory of a Member State, the courts of another Member State shall have jurisdiction to open territorial insolvency proceedings against that debtor only if it possesses an establishment within the territory of that other Member State. The effects of those proceedings shall be restricted to the assets of the debtor situated in the territory of the latter Member State.

    Any judgment opening insolvency proceedings handed down by a court of a Member State which has jurisdiction shall be recognised in Belgium from the moment that it becomes effective in the Member State of the opening of proceedings without the need for separate exequatur proceedings.

    Foreign insolvency court decisions not covered by the Regulation (EC) 2015/848 may require separate exequatur proceedings in order to be recognized in Belgium.

    Belgium has signed but did not ratify the UNCITRAL Model Law on cross-border insolvency. There are no plans for its ratification in the near future.

  17. Can debtors incorporated elsewhere enter into restructuring or insolvency proceedings in the jurisdiction?

    The insolvency court located in the jurisdiction in which the debtor has its COMI centre is exclusively authorized to open insolvency proceedings. For legal entities the COMI is presumed to be the location of the registered office unless the registered office has been transferred to another jurisdiction during the three months prior to the application for insolvency proceedings.

  18. How are groups of companies treated on the restructuring or insolvency of one or more members of that group? Is there scope for cooperation between office holders?

    The new insolvency code introduces the concept of cooperation in the event of the insolvency of a member of a group of company with the appointment of one coordinating judge. While this still does not permit consolidated group procedures, it may result in savings in time and costs and reduce conflicts of interests.

  19. Is it a debtor or creditor friendly jurisdiction?

    Belgian insolvency law is highly regulated and strikes a good balance between the rights of debtors and creditors.

  20. Do sociopolitical factors give additional influence to certain stakeholders in restructurings or insolvencies in the jurisdiction (e.g. pressure around employees or pensions)? What role does the state play in relation to a distressed business (e.g. availability of state support)?

    In the context of insolvency, the Belgian legislator has granted strong legal securities for employees, FPS FINANCE (treasury department) and the National Social Security office. Labour unions and employee representatives have an increased say in larger insolvency proceedings.

    The enterprise courts are obliged by law to set up one or more chambers for companies in difficulties in order to monitor the situation of debtors in difficulty, to safeguard the continuity of their activities and to ensure the protection of the rights of creditors. Useful information and data on debtors experiencing financial difficulties are centralized at the enterprise court of the territory in which the debtor has its COMI. They can summon and hear the debtor in order to obtain all information about the state of affairs and about any reorganization.

  21. What are the greatest barriers to efficient and effective restructurings and insolvencies in the jurisdiction? Are there any proposals for reform to counter any such barriers?

    Belgium has made extensive progress in making the restructuring and insolvency procedures more efficient, modern and effective, inter alia through the introduction of the following recent laws:

    • new insolvency law, Book XX of the Economic Law Code (applicable as from 1 May 2018);
    • revised law concerning securities on movable property, Pledge Act of 11 July 2013 (applicable as from 01 January 2018); and
    • a new company code, the new Belgian Companies and Associations Code (applicable as from 01 May 2019).

    Greatest barriers at the moment are the duration of insolvency proceedings, the absence of pre-pack legislation and possible inconsistencies between the new laws.