Occupational recovery

Verified 01 January 2023 - Directorate of Legal and Administrative Information (Prime Minister), Ministry of Justice

The re-establishment procedure is intended for the individual contractor (EI), theEIRL: titleContentand the micro-entrepreneur. It offers the company an opportunity to bounce back quickly with debt forgiveness, without resorting to a judicial liquidation. Businesses are excluded from this scheme.

The occupational recovery is applicable toIndividual entrepreneur (IS), atEIRL: titleContent or at micro-entrepreneur that meets all of the following conditions:

  • Status of cessation of payments
  • Judicial Redress manifestly impossible
  • No employee in last 6 months
  • Possession of a active less than €15,000(this threshold is determined by taking into account all the professional and personal assets of the individual contractor)
  • Have been in operation for more than a year
  • No follow-up procedure judicial liquidation or ongoing prud'homal proceedings
  • No judicial liquidation in the 5 years preceding the application for professional recovery

In order to benefit from the professional recovery, the entrepreneur must have an asset of less than €15,000. The assets of the individual entrepreneur are the personal and professional assets of the individual entrepreneur.

Warning  

the value of the sole trader's principal residence is not taken into account in the calculation of the asset.

How do I proceed?

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Merchant or craftsman

The sole trader must complete the application form for the opening of the administration or liquidation procedure (with professional recovery).

He must file it with the commercial court of the seat of his company.

Application for the opening of proceedings for reorganization or winding-up by the courts (with or without occupational reinstatement)

Who shall I contact

The court shall not initiate the procedure for re-establishment of employment until it has ascertained that the conditions are met.

If the contractor does not meet the conditions required, the court shall reject his application and decide on the application to open the procedure judicial liquidation.

Agricultural or liberal activity

The sole trader must complete the application form for the opening of the administration or liquidation procedure (with professional recovery).

He must file it with the court of law where his company has its seat.

Application for the opening of proceedings for reorganization or winding-up by the courts (with or without occupational reinstatement)

Who shall I contact

The court shall not initiate the procedure for re-establishment of employment until it has ascertained that the conditions are fulfilled.

If the contractor does not meet the conditions required, the court shall reject his application and decide on the application to open the procedure judicial liquidation.

Organization of the vocational reinstatement procedure

The court initiating the professional recovery procedure shall appoint a judge to gather all information on the amount of the contractor's liabilities and the value of the contractor's assets.

The court shall also appoint a judicial representative to assist the judge in this function.

The judicial representative must inform the creditors known at the initiation of the procedure. He asks them to communicate, within two months, the amount of their claim and the date of the maturities.

The procedure shall be opened for a period of 4 months, with no possible extension.

Contrary to what happens for a judicial liquidationHowever, the contractor is not divested. It retains the power to manage and dispose of its assets.

The personal recovery procedure shall not result in the cessation of legal proceedings.

If the Contractor is sued (or is the subject of a formal notice) by a creditor, the judge may defer payment of the sums due within four months. It may also order the suspension of enforcement proceedings (such as seizures).

Warning  

at any time during the professional recovery procedure, the court may open the bankruptcy procedure if it is established that the contractor is not acting in good faith.

The closure of the occupational recovery results in the erasure of all debts professional or personal prior the opening judgment. These claims must have been reported to the judicial representative.

The final judgment shall include the quantified statement of the debts written off with the name or designation and the domicile or registered place of business of the creditors.

However, some debts are not forgiven and remain due:

  • Employees' claims (wages, holiday pay,...)
  • Maintenance claims (maintenance)
  • Claims arising from a criminal offense committed by the sole trader (e.g. embezzlement)
  • Claims related to property acquired under an inheritance opened during the proceedings
  • Claims relating to rights attaching to the creditor (e.g. damages for personal injury)
  • Claims for repayment of sureties or persons who have given a guarantee

No debt shall be forgiven where the amount of the total liability is disproportionate to the value of the asset. The contractor's principal residence is not included in the calculation of the assets.

FYI  

where the proceedings are the subject of a final judgment involving the cancelation of debts, the president of the court may decide that the public treasury shall make the advance payment of duties, taxes, or emoluments fees charged by the court registries and notification and publicity fees.

Formalities of the judgment for the closure of professional recovery

In the 15 days of the final judgment, the Registrar of the General Court shall carry out the following formalities:

  • Insertion of the notice of the final judgment in the Official Bulletin of Civil and Commercial Advertisements (Bodacc)
  • Publishing to RNE: titleContent , for a commercial activity, also published in the SCR: titleContent.

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