Bankruptcy Act

TITLE III DEBT REPAYMENT SCHEME FOR NATURAL PERSONS

Chapter 2 Legal Effects of the Application of a Debt Repayment Scheme

Article 295 Liquidation estate
- 1. The liquidation estate of the debtor shall be comprised of the property of the debtor at the time of the judgment ordering the application of the Debt Repayment Scheme and the property that he will acquire during the application of that scheme.
- 2. From the income and periodic distributions, howsoever described, which the debtor will acquire, an amount equal to that part which is exempted from attachment as referred to in article 475d of the Code of Civil Procedure shall, without prejudice to paragraph 2, remain outside the liquidation estate.
- 3. The magistrate ('rechter-commissaris') may, upon the request of the debtor or administrator or of his own motion (ex officio), increase by means of a written order the amount meant in paragraph 2 with a nominal amount to be set in that written order. The magistrate in ('rechter-commissaris') may set additional conditions in his written order and may grant retroactive effect to it.
- 4. Furthermore the following assets shall remain outside the debtor’s liquidation estate:
a. assets acquired by the debtor in another way than gratuitously pursuant to a contract made during the application of the Debt Repayment Scheme, if the performance of the debtor related to such acquisition does not burden the liquidation estate;
b. household effects insofar as not excessive as referred to in Article 5 of Book 3 of the Civil Code;
c. that what is mentioned in Article 21, under (1°), (3°), (5°), (6°) and (7°);
d. the amount determined by the court or by the magistrate ('rechter-commissaris'), in accordance with Article 21, under (4°).
- 5. An asset as referred to in paragraph 4, under (a), shall nevertheless fall within the debtor’s liquidation estate if its value considerably exceeds the value of the performance related to the acquisition. Article 22a applies accordingly.
- 6. Article 22 applies accordingly with respect to paragraph 2 and paragraph 4, under (c) and (d). Article 22a shall apply accordingly.

Article 295a [repealed on 01-01-2008]

Article 296 No right of disposition; restricted right of administration
- 1. As a result of the judgment ordering the application of the Debt Repayment Scheme, the debtor shall lose by operation of law:
a. the right to dispose of property belonging to the liquidation estate;
b. the right to perform and permit juridical acts with regard to such property.
- 2. Upon the request of the administrator, the debtor must deliver to him all property belonging to the liquidation estate.
- 3. The magistrate ('rechter-commissaris') may, upon the request of the debtor or administrator or of his own motion (ex officio), determine, by written order, that the debtor shall administer certain property specified for such purpose.

Article 297 Restricted capability of the debtor to perform juridical act
- 1. Without prejudice to Article 296, the debtor may perform juridical acts independently.
- 2. Nevertheless, the debtor shall require the consent of the administrator to perform the following juridical acts:
a. the entry into a credit transaction in the meaning of the Financial Supervision Act;
b. the entry into contracts pursuant to which he commits himself as surety or otherwise as co-debtor, gives a guarantee on behalf of a third party or covenants to provide collateral for the debt of a third party;
c. the making of gifts, with the exception of usual gifts insofar those are not excessive.
- 3. A juridical act performed in breach of the paragraph 2 is voidable and may be nullified. Only the administrator may invoke such grounds of voidabillity.

Article 298 Liability of the liquidation estate for debts arisen after the start of the Debt Repayment Scheme
The liquidation estate shall not be liable for obligations of the debtor which arise after the judgment ordering the application of the Debt Repayment Scheme, except insofar as the liquidation estate benefits as a result thereof.

Article 299 Effect of the Debt Repayment Scheme on claims of creditors of the debtor
- 1. A Debt Repayment Scheme shall have effect on:
a. claims against the debtor existing at the time of the judgement ordering the application of the Debt Repayment Scheme;
b. claims against the debtor which arise after the judgment ordering the application of the Debt Repayment Scheme on account of the nullification of a null and void or voidable contract in which the debtor had entered into prior to that judgment;
c. claims for damages on account of a failure in the performance which occurred in itself after the judgment ordering the application of the Dept Repayment Scheme, yet in respect of a claim acquired against the debtor prior to that judgment;
d. claims against the debtor which arise after the judgment ordering the application of the Debt Repayment Scheme as a result of the fulfilment of a condition subsequent accepted by the debtor prior to that judgment;
e. claims against the debtor arisen pursuant to Article 10 of Book 6 of the Civil Code on account of a legal relationship existing at the time of the judgment ordering the application of the Debt Repayment Scheme, which claims remained unsatisfied after that judgment.
- 2. During the application of the Debt Repayment Scheme legal actions for the purpose of settlement of a claim falling within the scope of the liquidation estate may not be instituted against the debtor otherwise than by submitting that claim for verification.
- 3. Articles 57 to 59, inclusive, shall apply accordingly.

Article 299a Claims related to debts for studies
- 1. A Debt Repayment Scheme shall not apply to claims related to debts for studies to which Chapter 6 of the Studies Financing Act 2000 (Wet studiefinanciering 2000) applies, except as far as it concerns claims relating to overdue debts (arrears) referred to in Article 6.8 of that Act, existing at the time of the order for application of the Debt Repayment Scheme.
- 2. As long as a Debt Repayment Scheme applies, the redemption phase referred to in Article 6.7 of the Studies Financing Act 2000 (Wet studiefinanciering 2000) shall be suspended. During this period no interest shall accrue on claims related to debts for studies.

Article 299b Right of retention
- 1. A creditor who has a right of retention on a thing belonging to the debtor shall not lose such right by a judgment ordering the application of the Debt Repayment Scheme.
- 2. Insofar as this is in the interest of the liquidation estate, the administrator may return the thing to the liquidation estate by payment in full of the claim in respect of which the right of retention may be exercised.
- 3. The creditor may allow the administrator a reasonable period to apply the provision of paragraph 2. If the administrator has not returned the thing to the liquidation estate as provided by paragraph 2 within such period, the creditor may sell it with corresponding application of the provisions applicable to the right of a pledge, or if it relates to immovable property, of a mortgagee in regard of the foreclosure (sale under execution) of a pledged or mortgaged asset without recourse to the court (summary foreclosure). Upon a request of the administrator the magistrate ('rechter-commissaris') may extend such period one or more times.
- 4. In case of registered property, the creditor must, in order not to forfeit the right of summary foreclosure, within fourteen days of expiry of the period referred to in paragraph 3 serve notice by writ on the administrator that he will proceed to foreclosure and cause such writ to be recorded in the public registers.
- 5. The administrator may set a reasonable period within which the creditor may exercise the right of summary foreclosure in accordance with paragraph 3. If the creditor has not sold the thing within this period, the administrator may demand that it is handed over to him and sell it pursuant to Article 326 or 347, paragraph 2, without prejudice to the priority ranking conferred on the creditor under Article 292 of Book 3 of the Civil Code. Upon the request of the creditor, the magistrate ('rechter-commissaris') may extend this period one or more times.

Article 300 Effect of a Debt Repayment Scheme for sureties and co-debtors
The Debt Repayment Scheme shall not apply (have no effect) for the benefit of sureties and other co-debtors.

Article 301 Seizures (attachments) made before the start of the Debt Repayment Scheme
- 1. A claim of the Tax Collector, referred to in article 19 of the Tax Collection Act 1990 (Invorderingswet 1990), shall not be admitted.
- 2. All attachment proceedings (foreclosures) instituted at the time of the judgment ordering the application of the Debt Repayment Scheme with the purpose to obtain recourse for claims against the debtor shall be suspended.
- 3. Any attachment (seizure) made shall lapse as of the day on which the application of the Dept Repayment Scheme has been ordered by the court. The registration of a declaration issued for this purpose by the magistrate ('rechter-commissaris') upon the request of the administrator, shall authorise the keeper of the public registers to delete the registration of such an attachment (seizure).
- 4. An attachment which has lapsed shall revive as soon as the application of the Debt Repayment Scheme ends on the basis of the provision of Article 350, paragraph 3, under (b), provided that the property then still belongs to the liquidation estate. If registration of the attachment in the public registers has been deleted, the revival shall lapse if no writ for notification of the debtor of the revival has been recorded within fourteen days of such revival.
- 5. Paragraph 2, 3 and 4 shall apply also with regard to a foreclosure which has been started and an attachment for the recovery of claims secured by a pledge or mortgage, insofar as such foreclosure was not started or such attachment was not made on property which constituted special collateral for such claims.

Article 302 Release of the debtor from detention
If the debtor is held in detention (imprisonment), he shall be released by operation of law by a judgement ordering the application of a Debt Repayment Scheme, unless the detention takes place for another reason than on account of a claim in respect of which the Debt Repayment Scheme applies.

Article 303 Interest accrued as of the start of the Debt Repayment Scheme
- 1. With effect from the start of the day on which the judgment ordering the application of a Debt Repayment Scheme was rendered, no statutory or contracted interest shall be due by the debtor on claims in respect of which the Debt Repayment Scheme applies.
- 2. The obligation to pay such interest shall revive with retroactive effect as soon as the application of the Dept Repayment Scheme has ended on the basis of Article 312, paragraph 2, or as of the start of the day on which the judicial decision for termination of the Dept Repayment Scheme rendered pursuant to Article 350, paragraph 3, under (c) p to and including (g) has become final and binding.
- 3. The District Court may, in its judgment ordering the application of the Debt Repayment Scheme or by later judgment, declare paragraph 1 inapplicable with regard to interest due on a claim which is secured by a mortgage taken out on registered property where the debtor resides, if this is in the interest of the debtor’s liquidation estate. After the Dept Repayment Scheme has been declared applicable, the magistrate ('rechter-commissaris') may declare so by written order upon the request of the administrator if this is in the interest of the debtor’s liquidation estate.

Article 304 Obligations for the regular supply of gas, water, electricity or heat
- 1. A counterparty may not, in relation to the debtor, withhold the performance of an obligation resulting from an agreement for the regular supply of gas, water, electricity or heat, required to provide the primary necessities of life on the ground that the debtor has not performed a financial obligation which already existed prior to the judgment ordering the application of the Debt Repayment Scheme.
- 2. The non-performance by the debtor of an obligation as meant in paragraph 1, which non-performance took place prior to the judgment ordering the application of the Debt Repayment Scheme, does not produce a legal ground for the rescission of an agreement as meant in paragraph 1.
- 3. An appeal by the counterparty to a contractual stipulation, specifying that a judicial decision ordering the application of the Debt Repayment Scheme produces a legal ground for the rescission of an agreement as meant in paragraph 1 or shall automatically lead to a rescission of such agreement, shall only have effect if the administrator has given his consent thereto.

Article 305 Lease and farm lease agreements
- 1. If the debtor is a lessee (tenant), then the administrator or the debtor who acts with the administrator’s authorisation may prematurely terminate the lease agreement, provided that the termination takes place with due observance of the terms of notice (notice periods) mentioned in Articles 228, paragraph 2, 271, paragraph 2, en 293, paragraph 2, of Book 7 of the Dutch Civil Code. Furthermore, the agreed or customary notice periods must be observed, on the understanding, however, that three months' notice will in any case be sufficient. If rent has been paid in advance, no notice of termination of the lease can be given at an effective termination date before the last day of the period for which the rent as been paid already.
- 2. A non-performance by the debtor of a financial obligation arisen from a lease agreement for residential space, which non-performance took place prior to the judgment ordering the application of the Debt Repayment Scheme, does not produce a ground for termination or rescission of the lease agreement. Where, prior to the judgment ordering the application of the Debt Repayment Scheme, a judgment for eviction of residential space has been rendered on account of such a non-performance, the enforcement of that judgment will be postponed during the application of the Debt Repayment Scheme, on the condition that the rent accrued as of the judgment ordering the application of the Debt Repayment Scheme will be paid in time. The duration of the lease agreement is extended with the period that the Debt Repayment Scheme is applicable.
- 3. The lessor (landlord) may terminate the lease agreement prematurely if the debtor, in his relationship to the lessor (landlord), does not comply with an obligation which has come to existence after the judgment ordering the application of the Debt Repayment Scheme, provided that notice of termination is given at an effective termination date in conformity with a termination date as indicated by local custom for such lease agreements. The second and third sentence of paragraph 1 shall apply.
- 4. If the debtor is a farm lessee (agricultural lessee), paragraph 1, 2 and 3, shall apply accordingly.

Article 306 Null and void payments of claims from property not belonging to the liquidation estate
A payment made for the settlement of claims to which the Dent Repayment Scheme applies, yet made from property of the debtor which does not form part of the liquidation estate, is null and void.

Article 307 Setting-off a claim against a debt to the debtor
- 1. A person who is both, debtor and creditor of a person in respect of whom the Debt Repayment Scheme is ordered, may only compensate (set off) his debt against a claim to which the Debt Repayment Scheme applies if both, the claim and the debt, have come to existence prior to the judgment ordering the application of the Debt Repayment Scheme.
- 2. Article 53, paragraph 2 and 3, apply accordingly.

Article 308 Imputation of payments from property not belonging to the liquidation estate
A payment made by the debtor from property which does not form a part of the liquidation estate shall not be imputed to a claim to which the Debt Repayment Scheme applies.

Article 309 [repealed on 01-01-2008]

Article 309a assets pledged on account of a financial collateral agreement
Excluded from the property meant in Article 309, paragraph 1, are assets pledged on account of a financial collateral agreement as referred to in Article 51 of Book 7 of the Civil Code.

Article 310 Payment of claims of the debtor or creditor to which the Debt Repayment Scheme does not apply
- 1. Upon the request of the administrator or the debtor or of his own motion (ex officio), the magistrate ('rechter-commissaris') may determine, by written order, that claims for the payment of a sum of money, which claims belong to the debtor, but do not form a part of the debtor’s liquidation estate, must be paid to the administrator. The magistrate ('rechter-commissaris') may restrict the order to a specified period and to specified claims.
- 2. The administrator shall notify the relevant debtors of such claims by letter of the order referred to in paragraph 1.
- 3. Money received by the administrator pursuant to paragraph 1 shall not become a part of the debtor’s liquidation estate. The administrator shall keep a separate account in respect thereof.
- 4. Claims of creditors to which the Debt Repayment Scheme does not apply and which have been designated by the magistrate ('rechter-commissaris') for settlement, shall be settled for and on behalf of the debtor by the administrator from the funds received by him pursuant to paragraph 1.

Article 311 Continuation of the debtor’s enterprise on behalf of the liquidation estate
- 1. Upon the request of the administrator or the debtor or of his own motion (ex officio), the magistrate ('rechter-commissaris') may determine, by written order, that the debtor may, over a period to be set in that order, continue the conduct of his professional practice or business on behalf of the liquidation estate. The magistrate ('rechter-commissaris') may extend such a period each time and attach conditions to the order.
- 2. An order of the magistrate ('rechter-commissaris') as referred to in paragraph 1, has as effect that the debtor may perform all juridical acts for which the administrator has given his consent and which are necessary for the normal conduct of the debtor’s professional practice or business.
- 3. Claims resulting from a continuation of a professional practice or business for which the debtor is authorised pursuant to the present Article, including indebted rent, insofar imputable to such continuation, are estate debts*).

*) 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 312 Declaration of bankruptcy due to unpaid claims to which the Debt Repayment Scheme does not apply
- 1. During the application of a Debt Repayment Scheme the debtor may be declared bankrupt on the basis of unpaid claims to which the Debt Repayment Scheme does not apply.
- 2. In the event that the debtor is declared bankrupt, the application of the Debt Repayment Scheme shall end by operation of law. The liquidator in bankruptcy ('curator') shall publish the ending of the Debt Repayment Scheme in the publication referred to in Article 14, paragraph 3.
- 3. If, as a result of an objection, an appeal or an appeal in cassation, the declaration of bankruptcy gets nullified, then the application of the Debt Repayment Scheme shall revive by operation of law. This shall be notified in the publication referred to in Article 15, paragraph 1, second sentence. Article 15d, paragraph 1, shall apply accordingly.

Article 313 Application of other Articles during the application of the Debt Repayment Scheme
- 1. Articles 24 up to and including 31, 34 up to and including 38a, 40 up to and including 52, 54 up to and including 56 and 60a up to and including 63a shall apply accordingly.
- 2. The decision meant in Article 63a, paragraph 1, first sentence, may be given as well by the District Court which orders the application of the Debt Repayment Scheme, either of its own motion (ex officio) or upon the request of the debtor.