Belgium extends bankruptcy freeze to curb economic fallout from Covid-19
Tuesday, 12 May 2020
The temporary freeze of business bankruptcies, introduced as a result of the coronavirus crisis, has been extended until 17 June, several federal ministers announced on Tuesday.
The freeze, or “moratorium” was introduced in April to fight the economic consequences of the new coronavirus (Covid-19) pandemic.
Established by a royal decree with special powers, this partial freeze is aimed at companies which were in good financial health until 18 March but are now at risk of defaulting on their payments due to the coronavirus crisis, according to Economy Minister Nathalie Muylle, SME and Self-employment Minister Denis Ducarme and Justice Minister Koen Geens.
These companies cannot be seized, as they cannot be declared bankrupt at the request of their creditors. Furthermore, current contracts “cannot be terminated for non-payment” and the debtor (the company that owes money) is not obliged to declare bankruptcy.
“The company judge decides whether a debtor can benefit from this suspension if he invokes it as a defence,” the ministers said.