Filing a claim in insolvency

What it means

Filing a claim is the only route to money out of bankruptcy: a claim that is not filed is not satisfied, however undisputed and well invoiced it may be. It goes on a prescribed form and is delivered to the trustee.

It is not a lawsuit and not enforcement, but entry into one collective proceeding in which the debtor’s estate is divided among all creditors. The basic filing period in bankruptcy is 45 days from the declaration, which is published in the Commercial Bulletin.

A claim is also lodged in restructuring, with its own deadline and different consequences: it is paid not from the sale of assets but under the restructuring plan, which may write part of it off. In both proceedings, though, a claim that was not lodged is in practice no longer enforceable once they end.

How it works in practice

The filing states principal and accessories separately, the legal ground and whether the claim is secured; security has to be asserted here and nowhere else. The trustee reviews the filings, enters them in the list of claims and convenes the creditors’ meeting that elects the creditors’ committee.

If the trustee or another creditor denies the claim, the creditor has to defend it by action within a short deadline, or the denial stands. A properly filed claim is also the precondition for a tax-deductible write-off and for treating the debt as an irrecoverable receivable for VAT.

When a client’s customer goes into bankruptcy, we list every open invoice with its due date, calculate late-payment interest up to the day bankruptcy was declared and attach the proof of delivery. At the same time we consider an impairment allowance in the books, because lodging the claim promises nothing by itself.

What to watch out for

Lateness and a formal defect cost the same: a filing delivered after the basic period is still taken into account in bankruptcy, but the creditor loses voting and related rights, while a filing missing a prescribed particular is disregarded with no invitation to correct it. The dearest omission is security: a creditor who fails to assert it shares the residue with everyone else even though the collateral was sold.

Another mistake is continuing to chase the debtor directly after bankruptcy is declared, or setting the debt off. Claims can then be asserted only by lodging them, set-off is restricted, and a payment the debtor still managed to send can be challenged by the trustee and would have to be returned to the estate.