Preferred creditors and preferred debts

If there is a bankruptcy, the creditors often stand in line with their claims. If not all debts from the bankrupt estate can be settled then the ranking of creditors becomes important. Preferred creditors take precedence over competing and subordinated creditors. Legal preference debts take precedence over actual preference debts. If someone is admitted to debt rescheduling, preferred creditors must also cooperate.

Who are preferred creditors?

  • Ranking of creditors in the event of bankruptcy
  • Estate creditors and estate claims
  • Preferred creditors
  • Debts with preferred creditors are not always preferred
  • Competitive claims and subordinated creditors
  • Legal preferred debts versus actual preferred debts
  • Preferred debts and debt restructuring

Ranking of creditors in the event of bankruptcy

If a company or private person goes bankrupt, there is often a whole series of creditors. Anyone with an outstanding claim would like to collect it and can turn to the bankruptcy trustee. If the bankruptcy property is large enough and everyone's claim can be met, there is no problem. However, this is rarely the case. If the bankruptcy property is insufficient, the ranking of creditors suddenly becomes very important. In that case, the law determines the rank of creditors. The strongest are in that separatists with a real security right. A separatist is a creditor with a direct right to redress from a lien, mortgage or lien. In most cases this is a bank. They can exercise their rights as if there were no bankruptcy. This does not require the intervention of the liquidator.

Estate creditors and estate claims

Most creditors have claims that have arisen before the bankruptcy. This is normally a condition for payment. Estate claims are, however, an exception to this. These are claims that arose after the declaration of bankruptcy and that are related to this. This also includes commitments entered into by the liquidator for the management of the estate. Examples of estate claims are rental debts and wage debts from the moment of the declaration of bankruptcy and the salary of the receiver.

Preferred creditors

After the separatists and estate creditors come the preferred creditors offer. These creditors receive their claims before other (unsecured) creditors are addressed. The law establishes who are preferred creditors. These are:
  • The UWV
  • The tax
  • Employees with a wage claim dating from before the bankruptcy was pronounced

Debts with preferred creditors are not always preferred

That you have a debt with an institution designated by law as a preferred creditor does not necessarily mean that it is a preferential debt. The Tax and Customs Administration, for example, does have priority if you have a debt as a result of an incorrect tax return but not if the debt is related to improperly received or overpaid surcharges. The General Income-Related Regulations Act does not grant preferential status to reimbursement of benefits.

Competitive claims and subordinated creditors

Once the claims of the preferred creditors have been paid, the unsecured claims will be dealt with. These are 'normal' creditors who have not had collateral provided in the form of a pledge or mortgage. In addition, there are also subordinated creditors, where a loan agreement has determined that it is a subordinated claim. This category of creditors has the least chance of ever being able to collect their claim. We sometimes see this construction when a project has several financiers and one or more financiers declares that they will wait voluntarily for other creditors to be able to settle their claim.

Legal preferred debts versus actual preferred debts

If someone has accumulated debts, this can include legal preference debts and actual preference debts. below legally preferred debts debts with government institutions. This may concern the tax authorities, but also, for example, the social services or DUO (study debt). It is spoken of actual preferred debts when it concerns debts with institutions that can enforce payment through nasty measures. Think, for example, of the mortgage provider that you can evict from your house, an energy company that can turn off the heating or your health insurance company. As a debtor you are probably the first to pay off the actual preferred debts because you want to prevent the annoying measures. However, the law requires that legal preference debts take precedence.

Preferred debts and debt restructuring

If a debtor has a large debt burden, he or she can start a process of debt restructuring under strict conditions. The Debt Restructuring Natural Persons Act or Wsnp gives these people the opportunity to obtain a clean slate. When one "enters into debt restructuring", the attachments expire and creditors must turn to the administrator. The sanite (someone who is in debt restructuring) lives for three to five years from the absolute social minimum while everything else he or she earns is deposited into an estate account. The proceeds from everything of value in the possession of the sanite also comes to this estate account. The creditors are paid from this collected amount, whereby the ranking of creditors also applies. Creditors are required by law to cooperate in the reorganization.

Video: Preferential Payments to Creditors in Bankruptcy (February 2020).

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