Entrepreneurs may be able to avoid bankruptcy by anticipating difficulties - if they keep a close eye on the financial situation of their business.
Bankruptcy results from a persistent state of credit weakness and insolvency of a trader.
The Luxembourg and Diekirch district courts are the competent bodies in bankruptcy cases.
Coping with bankruptcy
A business owner has various means of safeguarding jobs and business activity.
Entrepreneurs having experienced bankruptcy should not lose confidence in their ability to embark on a new business.
Bankruptcy procedure: a step-by-step guide
Within Luxembourg, you can initiate bankruptcy proceedings in three ways:
- by admission: a business owner who becomes insolvent must inform the court clerk's office about this within the same month;
- by application: the bankruptcy is declared after application by one or more creditors of the company;
- ex officio by the court.
If you are judged bankrupt, you must relinquish the administration of your assets to a receiver who will be responsible for representing the bankrupt company and the interests of the creditors. The court will also appoint a bankruptcy judge responsible for accelerating and monitoring operations, management and liquidation of the bankrupt estate. The company must immediately cease its activities.
As soon as the bankruptcy judgment is announced, all civil proceedings must be suspended.
The Guichet entreprises business portal offers information on company bankruptcies.