Creditor claims in bankruptcy
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Any trader who ceases payments and whose credit is disrupted is bankrupt.
The bankruptcy procedure is initiated either:
- because the debtor has declared bankruptcy, to which they are legally obliged;
- by court summons by one or more creditors; or
- automatically by the court.
The publication of the bankruptcy in one or more newspapers circulated in Luxembourg serves to notify creditors of their debtor's bankruptcy.
As soon as a creditor is aware that their debtor is bankrupt, they must file a creditor claim with the clerk of the district court sitting in commercial matters within a 6-month deadline of the declaration of bankruptcy.
Some claims have a preferential status, which means that they will be paid before ordinary creditors – known as 'unsecured creditors' –, who are paid equitably from the assets remaining to be distributed.
Salaried workers must declare their receivable salaries and allowances due by the employer following the bankruptcy.
The trustee handling the bankruptcy verifies the claims and distributes the business's assets based on the ranking of claims.
If there are assets to be distributed, the creditors who have been admitted to a share in the payables (i.e. their claim has been accepted) are summoned to the rendering of accounts, before the closure of the bankruptcy.
If there are no assets to be distributed, or if they are insufficient to cover the costs and fees of the trustee, the bankruptcy is closed for insufficiency of assets and the creditors are not summoned.
Who is concerned
Creditors whose debtor has been declared bankrupt must file their creditor claims in a timely manner so that they can be accepted as part of the bankrupt party's liabilities.
Prerequisites
To validly assert a claim, creditors must be able to provide written proof of the claim (invoice, court decision concerning the recovery of a debt, etc.).
Deadlines
In order for the claim to be recognised as a liability in the bankruptcy, the declaration of claim must be filed within a 6-month deadline (on pain of debarment) from the judgment declaring the bankruptcy.
A creditor may apply in writing to the court to be exempted from debarment. To do this, the creditor must provide evidence of moral or material circumstances that prevented them from submitting their claim in good time.
How to proceed
Filing a creditor claim
Filing the claim directly with the court
Creditors can file a claim declaration with the clerk of the district court that sits in commercial matters and that declared the bankruptcy.
Filing the claim via MyGuichet.lu
The claim declaration can also be submitted online via MyGuichet.lu. This is a procedure without authentication.
In the context of the MyGuichet.lu procedure, you will namely have to:
- follow the instructions provided by the online assistant and indicate the required information;
- download and complete the claim declaration form in PDF format;
- sign the form electronically or manually;
- attach the form (claim declaration) as a supporting document to the MyGuichet.lu procedure.
Note: in the event of an electronic signature, the signature must be qualified.
Information provided on the claim declaration
The claim declaration must state:
- the creditor's identity, profession, registered address and bank details;
- the identity of the bankrupt party;
- the amount and origin of the claim;
- any related liens, pledges or mortgages and corresponding official documents validating them;
- the wording 'I affirm that this claim is true and sincere'.
The creditor must inform the trustee about any changes of address.
The declaration must be signed by:
- the creditor; or
- the authorised representative on their behalf. In this case, the authorised representative must have a power of attorney that:
- is attached to the claim declaration;
- states the amount of the claim; and
- contains an affirmation that the claim is true and sincere.
Supporting documents
The claim declaration must be accompanied by supporting documents justifying the claim.
For example: invoice, salary slips, sentence, judgement, payment order sentencing the bankrupt party to pay a sum, any other document which justifies the claim, etc.
Preferential nature of certain claims
The various debts may have a rank that allows for priority or preferential repayment before the repayment of the ordinary creditors, known as 'unsecured creditors'.
Preferential claims
Preferential claims are listed according to their preferential ranking.
The trustee settles such claims according to their priority as listed below (this list is not exhaustive), before paying any other creditors:
- legal costs;
- employees' claims, namely:
- salaries and allowances still owed by the employer after the bankruptcy. The sum of the following 3 amounts is limited to the amounts that would normally be due in the case of dismissal with notice from the date of the declaration of bankruptcy:
- the salary for the month in which the bankruptcy took place;
- the salary for the following month;
- 50% of the severance pay that would have been due in the event of a dismissal with notice;
- where applicable, any outstanding salaries during the 6 months of work prior to the bankruptcy.
- salaries and allowances still owed by the employer after the bankruptcy. The sum of the following 3 amounts is limited to the amounts that would normally be due in the case of dismissal with notice from the date of the declaration of bankruptcy:
Outstanding salaries prior to the last 6 months of work do not receive preference. These claims form part of unsecured claims;
- claims from public administrations;
- debts backed by mortgages;
- all other debts backed by collateral.
'Super-preferential' claims owed to employees
If the business's available assets cannot cover the employees' preferential claims within 10 days of the declaration of bankruptcy, the Employment Fund (Fonds pour l'emploi) guarantees the payment of part of such preferential claims, known as super-preferential claims.
The share of the claims not covered by the Employment Fund retain their status as preferential claims.
Applications must be submitted by the trustee or employee to the National Employment Agency (Agence pour le développement de l'emploi - ADEM).
Unsecured claims
Unsecured claims (i.e. non-preferential claims) all have the same ranking.
The trustee does not pay them until all preferential claims have been settled. They then distribute the assets on a 'pro rata' basis, i.e. in proportion to the amount of each claim with regard to the total amount of the claims accepted as liabilities.
Verification of claims and closure of the bankruptcy proceedings
The trustee verifies the claims as and when they are submitted by matching all the documents provided by each creditor with the records in the accounts of the bankrupt party.
If the claim is contested, the trustee informs the creditor by registered letter within 15 days from verification of the claim.
Debates on disputes, with the exception of debates on salary declarations, only take place at the request of the creditor. The request must be submitted within a set deadline on pain of debarment:
- the deadline is 40 days from the dispatch of the registered letter;
- it must be submitted by way of petition to the district court sitting in commercial matters.
Justified claims are included as outstanding liabilities in the bankruptcy proceedings.
Based on the verification reports and judgements handed down on the disputed claims, the trustee:
- makes a final determination of the bankrupt party's statement of liabilities;
- then prepares a report on:
- the bankruptcy;
- the likely result of the liquidation: apportionment plan.
Before the closure of the bankruptcy, the creditors admitted to the liabilities are invited to the rendering of accounts. The apportionment plan is added to the invitation letter.
Before the insolvency proceedings are closed, if there are any assets, the creditors receive the full amount or a fraction of the amount of their claim in accordance with the apportionment terms provided for in the rendering of accounts report.
Once the assets have been distributed, the trustee reissues the accounts and files a request with the court to declare the bankruptcy proceedings closed.
Online services and forms
Who to contact
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District Court
- Address:
- Luxembourg
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District Court District Court Diekirch
- Address:
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4, place Guillaume
L-9237
Diekirch
B.P. 164, L-9202 Diekirch
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District Court District Court Luxembourg
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National Employment Agency (ADEM)
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- info@adem.etat.lu
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National Employment Agency (ADEM) Employer Services
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19, rue de Bitbourg
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(+352) 247 88 000
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National Employment Agency (ADEM) Disability and Redeployment Department
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19, rue de Bitbourg
L-1273
Luxembourg
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(+352) 247 88 888
for jobseekers
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(+352) 247 88 000
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29, rue Aldringen
L-1118
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B.P. L-2926 Luxembourg
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National Employment Agency (ADEM) Diekirch Agency
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2, rue de Clairefontaine
L-9220
Diekirch
B.P. 7 L-9201 Diekirch
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National Employment Agency (ADEM) Career Guidance - Diekirch - Maison de l'orientation (Educational and Vocational Guidance Centre)
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7, avenue de la Gare
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23, Grand-rue
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National Employment Agency (ADEM) Dudelange Agency
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National Employment Agency (ADEM) Esch-sur-Alzette Agency
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1, boulevard Porte de France
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Esch-sur-Alzette
B.P. 289, L-4003 Esch-sur-Alzette
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National Employment Agency (ADEM) Wasserbillig Agency
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44, esplanade de la Moselle
L-6637
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National Employment Agency (ADEM) Wiltz Agency
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20, rue Winseler
L-9577
Wiltz
B.P. 57, L-9501 Wiltz
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- Fax:
- (+352) 95 86 11
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Open Ferme à 12h00
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National Employment Agency (ADEM) Financial Management of Support Measures - Young Persons
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10, rue Bender
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Luxembourg
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- (+352) 29 65 90
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- info.jeune@adem.etat.lu
- Website:
- https://adem.public.lu/en.html
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National Employment Agency (ADEM) Employer Services – 'Third-Country Nationals' unit
- Address:
- 19, rue de Bitbourg L-1273 Luxembourg-Hamm
- Phone:
- (+352) 247 88 000
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- (+352) 247 90 41 0
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National Employment Agency (ADEM) Job Protection Department
- Address:
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1, boulevard Porte de France
L-4360
Esch-sur-Alzette
B.P. 289, L-4003 Esch-sur-Alzette
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- (+352) 247 88 000
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