A firm owes you money but it has suspended payments and therefore cannot pay you. The law generally provides for two possibilities in this case:
- Either the firm can be saved; in this case, it will be placed under administration by a court order. The purpose of this procedure is to safeguard the firm, keep its business going, preserve jobs and sort out the liabilities, or
- the situation is so serious as to justify winding the firm up, which is bankruptcy in layman's language.
In both cases, as soon as the court has taken its decision, creditors can no longer proceed individually against the firm. The aim of this principle is to ensure that all creditors are on an equal footing and to protect the debtor's assets. To be paid, you must now prove your claim against the person - generally known as the administrator or liquidator - who is responsible for reorganising or liquidating the debtor's assets.
In order to make it far more difficult for a debtor to avoid having to pay his/her debts by transferring assets from one Member State to another, the Regulation on insolvency proceedings was adopted.
To obtain detailed information please select one of the flags listed on the right hand side.
This page is maintained by the European Commission. The information on this page does not necessarily reflect the official position of the European Commission. The Commission accepts no responsibility or liability whatsoever with regard to any information or data contained or referred to in this document. Please refer to the legal notice with regard to copyright rules for European pages.
The Commission is in the process of updating some of the content on this website in the light of the withdrawal of the United Kingdom from the European Union. If the site contains content that does not yet reflect the withdrawal of the United Kingdom, it is unintentional and will be addressed.