New legislation as of 1 January 2021

Below is an overview of the most important legislation related to Justice and Security that will come into force on 1 January 2021. Responsibility for this legislation rests with Minister for Legal Protection Sander Dekker.

Prevention of bankruptcies

As many companies are now no longer able to conduct their business in the usual manner due to the coronavirus pandemic, more companies are expected to be faced with money problems and perhaps even the threat of bankruptcy. The Private Composition (Prevention of Insolvency) Act (Wet Homologatie Onderhands Akkoord) could provide a solution in such cases. The Act makes it easier for companies to reach an agreement with creditors and shareholders on debt restructuring.

Payment deferral in bankruptcies due to COVID-19

The Temporary Act governing COVID-19 Measures by the Ministries of Social Affairs and Employment and Justice and Security now also comprises a payment deferral scheme, which will enter into force today. If a winding-up petition is filed or a company's continuity is at risk as a result of an attachment order or enforcement measure by a creditor, entrepreneurs are able to stop this and apply to the court for deferral of payments. This will enable entrepreneurs to postpone payments to the creditor in question so they can resolve their temporary liquidity problems and avert bankruptcy. One way for entrepreneurs to do this is under the Private Composition (Prevention of Insolvency) Act.

Better cooperation between courts

In order to help those seeking justice more promptly, districts courts and courts of appeals will be able to aid each other more easily with temporary shortages in session capacity. As part of this, the hearing locations of the four merged courts (Amsterdam, Rotterdam, Oost-Brabant and Overijssel) will be designated shared hearing locations, which allows for the swift alignment of capacity and demand. The merged courts hear specialised criminal cases in areas including fraud, environmental crimes and terrorism. The Act will furthermore allow other types of cases to be temporarily assigned to a hearing location at another court, eliminating the need to hand over cases.

The right to prior consultation of municipalities in case of protective guardians

People with problematic debts will receive better assistance because municipalities may advise the court on solutions once a person in debt has been placed under protective administration. Solutions can include continuation of the protective guardianship or a less rigorous form of municipal debt assistance. This has been made possible by a law put forward also on behalf of the State Secretary for Social Affairs and Employment Bas van ’t Wout. The right to prior consultation of municipalities ensures people with debts will receive the most appropriate form of assistance.

Review of the legal rules governing attachment and execution

Creditors are entitled to take measures if their accounts are not settled. However, this situation should not leave people facing a dead end. That is why the legal rules governing attachment and execution have been revised. The Act will be implemented in three stages, the first of which took effect on 1 October 2020. This stage entailed that people with debts will in principle not have assets such as household effects seized if the cost of selling these outstrips the proceeds. As of 1 January 2021, it will also no longer be possible to lay claim in full to the bank account of a person who is in debt. This will ensure people with debt do not fall below the poverty line and still have money left to live off.