Authorisation and approval of debt relief

Debt relief may be requested by an ‘honest’ debtor who is able to make a minimum repayment or has realisable assets. The creditors decide on the form of debt relief.

It is the debtor who applies for debt relief, in principle by means of a form that has been filled in and submitted by a lawyer, notary, bailiff, insolvency practitioner or an ‘accredited entity working to the public benefit’, unless the debtor themselves holds a legal or economic degree.

The insolvency court grants permission for debt relief if the conditions are met. The insolvency court rejects a debt relief application if, taking into account all circumstances, it can reasonably be assumed that there is dishonest intent or that the debtor is unable to make the ‘minimum repayment’. The minimum repayment must fully cover the insolvency practitioner’s fee and cash expenses, any outstanding and ongoing maintenance, the fee of the person drawing up the debt relief application, and a certain amount for ordinary unsecured creditors. The insolvency court also rejects a debt relief application if the results of the proceedings to date show that the debtor has been reckless or negligent in the fulfilment of obligations in insolvency proceedings. The insolvency court will also reject an application if the debtor has been granted debt relief in the last 10 years, debt relief has been terminated in the last five years due to dishonest intent, or proceedings have been discontinued in the last three months because the debtor withdrew their application. An application is not rejected on the grounds outlined above if the debtor made a commitment for a justifiable reason or if the amount of the debt is very disproportionate to the service provided.

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