What if there is really no way out?

For me, the end did not come from a decision. It was forced on me. My main supplier went bankrupt, and with it everything fell away. There was no time left to prepare anything. I had to go to the bankruptcy trustee without having anything in order.

This is what I wish I had known then. Not how to avoid bankruptcy, because sometimes that is no longer possible. But how not to go through it unprepared. If you are not that far yet, read my business is losing money, what now first.

When is it really over?

Under Belgian law, a business is bankrupt when it has permanently stopped paying and can no longer get credit. At that point, as a director, you no longer have a choice: you must file for bankruptcy with the enterprise court within one month.

Carrying on while you know, or should have known, that there is no reasonable prospect left is dangerous. The trustee can then hold you personally liable for the shortfall. Hoping things will still turn around is no longer courage at that point. It is a risk to yourself.

What you still control

Once you go to the trustee, it is over. Your business is no longer yours. You cannot decide anything anymore, and you are not allowed into your own business. Anything you still want to arrange has to happen before that day. That is why the period before it matters.

What I would have prepared differently

Bring your current account to zero

If you owe your company money, the trustee claims it immediately. So pay it back while you still choose the timing. If your company owes you money, you are an ordinary creditor, at the back of the queue. My current account was in my favour. That money is gone. More on this in the director's current account and why it becomes dangerous.

Know where you are personally liable

Go through all your loans and lease contracts. In my case, the bank and the leasing companies wrote to me straight away demanding payment, or interest would be added. The company car was towed away. My older loans dated from before the banking crisis, when I did not always have to give a personal guarantee. Today banks ask for one far more often. Discuss it with your bank and your lawyer. But do not quietly pay off the debt you guaranteed first: a trustee can challenge such a payment.

Do not wait to restructure

If staff have to go, do it on time and by the rules. In a bankruptcy, employees have a preferential claim, and the Belgian closure fund steps in for what the estate cannot pay. The longer you wait, the larger the notice payments. And the less is left for all the other creditors.

Pay with care

Withholding tax and VAT first: if they stay unpaid, you can be held personally liable as a director. The same goes for wages. Do not order anything you cannot pay for. And have the order of your payments checked by a lawyer who specialises in insolvency, because this is where you make mistakes without knowing it.

Keep your records complete

With the trustee, it feels as if you are being interviewed and analysed. The better your paperwork, the shorter and calmer that conversation. How it goes is described in going to the bankruptcy trustee.

Nobody thinks with you, unless you ask

My lawyer filed the bankruptcy. My accountant kept the books. Both did their job. But nobody said: wait, let us look at your current account and your guarantees first. Everyone thinks about their own part, and you hardly find anyone who thinks with you about the whole picture.

So ask for it yourself. Tell your lawyer and your accountant: "I want to prepare this, not just file it. What should I still do now?"

If it weighs on you, and that is allowed, DYZO also offers free psychological support. Who else can help is explained in who helps business owners in Flanders.

What you can automate

An overview of all your loans and lease contracts, with term, outstanding balance and whether you are personally liable, that updates itself. Boring to build. But that is exactly the overview I needed back then.

The claim

Sometimes you cannot avoid bankruptcy. Going bankrupt unprepared, you can.

Tell me what keeps you up at night. No-obligation conversation. No sales talk.

This article is my own experience, not legal advice. If you are in this situation, talk to DYZO or to a lawyer who specialises in insolvency.