Belgium has put a freeze on bankruptcies caused by the novel Coronavirus (Covid-19) crisis until 17 May, under a royal decree promulgated in the Belgian Royal Gazette.
“This is a breath of fresh air for the finances of our SMEs in difficulty,” said Denis Ducarme, Minister for Small and Medium-Sized Enterprises (SMEs) and Consultants.
The decree covers businesses severely affected by the crisis but which had been in good health up to 18 March.
It protects them against foreclosures, and from being declared bankrupt at the request of their debtors, although this can still occur at the request of the Attorney General or of the debtors themselves.
Ongoing contracts cannot be terminated for non-payment and, for now, debtors are not obliged to file declarations of bankruptcy.
Commercial court judges will decide whether debtors can benefit from the suspension if they invoke it in their defence.
“This reform will allow businesses that have fallen behind on payments and whose credit has been affected to be protected against forced bankruptcies declared by commercial courts,” Minister Ducarme said in a press release.
“The aim is to give businesses a respite in terms of cashflow to help them go through this crisis more smoothly.”
The freeze does not cover businesses that were already undergoing bankruptcies. “Fraudulent bankruptcies will, naturally, continue to be investigated by the courts,” the minister’s office said.