Proposed EU Directive on harmonisation of avoidance actions to have limited effect on Belgian law


The principles outlined in the European Commission's proposal for a Directive harmonising certain aspects of insolvency law is not expected to lead to extensive reform of Belgian rules since Belgian law already provides a clear set of rules that give creditors and trustees instruments to avoid contestable acts in the context of bankruptcy, which, in some cases, go further than the principles set out in this Proposal.

Date of cessation of payment

The main trigger under Belgian law is the date of cessation of payment. Cessation of payment implies that a company is permanently unable to pay a significant part of its debts that are due, certain, and payable, and that it lost its creditworthiness. This is similar to the criteria set forth in the Proposal.

In Belgium, the date of cessation of payment is, in principle, fixed by the Court at the date of the opening of bankruptcy unless it is already clear that the conditions for cessation of payment were met at an earlier date (with a maximum of six months prior to the opening of bankruptcy, unless the company was dissolved beforehand to deliberately harm the rights of its creditors).

The timeframe for challenging certain transactions pursuant to Belgian law differs from the timeframes set forth in the Proposal, depending on the nature of the concerned acts.

General avoidance rules in Belgium

As a general rule, Article XX.111 of the Belgian Economic Code (BCE) provides that the following acts carried out after the "cessation of payments" may be declared non-opposable to the bankruptcy estate:

  1. any act involving the free disposal of movable or immovable property, as well as any act, transaction, or contract, whether for consideration or not, where the value of what the bankrupt company has given substantially exceeds the value of what it has received in return;
  2. all payments, whether in cash, by transfer, sale, or otherwise, of debts not due and all payments by abnormal means of payment (other than cash, transfer, or commercial paper) of debts due;
  3. all stipulated mortgages and all rights of usufruct or pledge established on the debtor's goods for past debts.

Pursuant to Article XX.112 BCE, all other payments that do not fall under XX.111 BCE done by the debtor for overdue debts, as well as transactions for consideration, can be declared non-opposable if the receiving or contracting party was aware of the cessation of payments at the time of payment.

These principles are similar to the terms set forth in Article 6 and 7 of the Proposal, with the main difference that Belgian law goes into more detail on the type of acts that can be challenged.

While the acts mentioned in Articles XX.111 and XX.112 BCE can be challenged up to six months before the opening of bankruptcy by moving back the date of cessation of payment, the Proposal foresees only a period of three months prior to the request for opening of the insolvency procedure, but a period of one year for transactions against no or a manifestly inadequate consideration.

Legal acts intentionally detrimental to creditors

In addition, Article XX.114 BCE states that acts or payments made with fraudulent prejudice to creditors' rights can be declared non-opposable regardless of the date on which they took place.

This rule finds its equivalent in Article 8 of the Proposal, which foresees the possibility to contest acts of which the concerned party knew or should have known of the debtor’s intent to cause detriment to the general body of creditors. The Proposal goes into more detail on the aspect of knowledge by including a presumption that a party closely related to the debtor (as further detailed in the list of definitions of the Proposal) will be presumed to have known that the act was intentionally detrimental to creditors. While the Proposal foresees the possibility to go back up to four years, Belgian law allows for the challenging of such acts regardless of the date in case of fraudulent prejudice.


Chapter 3 of the Proposal goes into detail on the consequences of avoidance actions. Belgian insolvency law does not contain a set of detailed rules that specify the consequences of avoidance actions but instead falls back on the general principles of civil law. If an act is successfully avoided, this act is considered never having existed, and any benefits that a party may have received will need to be reimbursed to the bankruptcy estate. Depending on the behaviour of the party, this could also result in liability for additional damages.


Although there are some differences between the provisions of Belgian law and those set forth in the Proposal, Belgian law generally complies with the principles of the Proposal. Some minor tweaks to certain provisions may be necessary, but no major reform is to be expected. The points where the Proposal goes into greater detail are often addressed in case-law.

For more information on the proposed Directive and insolvency procedures in Belgium, contact your CMS client partner or these CMS experts.