Company in difficulty: first steps and prohibitions for creditors

By Yasmine EDDAM12 April 2025

The announcement of the opening of insolvency proceedings - safeguard, receivership or compulsory liquidation - against a customer, supplier or business partner is often a source of great concern for its creditors. Will I get paid? What do I have to do? Can I continue to demand payment? These are legitimate questions, and the situation calls for a rapid, informed response. As soon as the business is declared open, very strict rules apply that will affect your chances of recovering even part of your debt. It is therefore essential to act correctly from the outset.

This article sheds light on the two fundamental points that all creditors must master immediately: the imperative obligation to declare their claim and the prohibitions that apply to you as soon as the proceedings are opened.

The vital obligation to declare your claim

The first and undoubtedly most important step to take is to declare your claim. Without this formal declaration, you are virtually non-existent in the eyes of the procedure.

Why declare?

Declaring your claim is a prerequisite for sine qua non so that it can be officially recognised as part of the collective proceedings. This is the act that enables you to be entered on the list of creditors and, consequently, to hope to participate in any distribution of funds or to be included in a safeguard or recovery plan.

Forgetting to declare your claim, or doing so too late, has radical consequences. Your claim will not be "extinguished" as in the past, but will become "unenforceable" against the proceedings. In practical terms, this means that you will not be able to receive any payments under these proceedings, whether in the form of liquidation distributions or via a repayment plan. This is a severe sanction, provided for in article L. 622-26 of the French Commercial Code.

What claims must you declare?

The principle is broad: you must declare all claims arising prior to the date of the opening judgment of the collective proceedings. This includes :

Unpaid invoices.
Outstanding loan instalments.
Compensation due (e.g. for previous breach of contract).
Conditional claims or even claims that are still being contested.
Receivables not yet due (forward).

The nature (commercial or civil) and terms of the claim are irrelevant. The general rule is set out in article L. 622-24 of the French Commercial Code.

One major exception concerns wage claims: employees do not have to declare their wages and allowances, as a specific verification and payment system (via AGS in particular) is provided for them.

It should also be noted that certain receivables after the opening judgment, if they are not considered to be "useful" to the proceedings according to precise criteria (which will be detailed in a forthcoming article), must also be declared as if they were prior to the judgment. This is a technical point that deserves attention.

How do I make a declaration?

The declaration of claim must comply with a precise set of formalities.

The recipient The declaration must be sent to exclusively to the judicial representative (whose name and contact details appear in the opening judgment and its publication) in the case of safeguard or reorganisation, or to the liquidator in the event of compulsory liquidation. Please note: never send it to the insolvency administrator if one has been appointed, as he or she is not competent to receive it. An error in address may render your declaration ineffective.
The person making the declaration Who can declare?
- The creditor itself (in the case of a company, by its legal representative: manager, chairman, etc.).
- Any employee of the creditor (e.g. an employee), provided that he or she has a specific, written delegation of authority to perform this act.
- Any agent of the creditor's choice, such as a lawyer, chartered accountant or debt collection agency, provided they have special authority (except for lawyers, who are presumed to have received a mandate). Article L. 622-24 paragraph 2 of the French Commercial Code specifies this.
Form and content The declaration must be made in writing. We strongly recommend that it be sent by registered letter with acknowledgement of receipt, as this provides proof of the date on which it was sent. It must contain, as detailed in articles L. 622-25 and R. 622-23 of the French Commercial Code :
- The amount claimed as at the date of the opening judgment, giving details of the principal and accrued interest.
- For interest that would continue to accrue (in the case of loans of more than one year, see below), the method of calculation must be indicated.
- The nature of the claim (invoice, loan, damages, etc.).
- If the claim is subject to a lien or security interest (mortgage, pledge, collateral security, special lien, etc.), this must be stated precisely and supporting documents attached (copy of mortgage registration, deed of pledge, etc.). Failure to do so will result in the creditor being treated as an unsecured creditor and losing the benefit of the guarantee.
- Documents justifying the claim (copies of invoices, contracts, IOUs, judgments, etc.). You may attach copies, but the agent may ask for the originals if necessary.

An incomplete or imprecise declaration risks being rejected or accepted for a lower amount.

How long do I have to declare?

Time is of the essence. The basic deadline for declaring your claim is two months from the date of publication of the opening judgment in the BODACC (Bulletin Officiel Des Annonces Civiles et Commerciales). This is a national publication that you should keep an eye on.

This period is extended to four months for creditors domiciled outside mainland France (or outside the overseas department or territory where the proceedings have been opened).

It is therefore essential to check the official publications regularly or to ensure that the judicial representative has identified you in order to receive a warning (which is not always the case, especially if you are not a regular supplier).

What are the consequences of forgetting to declare?

As mentioned above, if you fail to declare your claim within the time limit, your claim will no longer be enforceable against you (article L. 622-26 of the French Commercial Code). You lose your right to participate in the payments organised within this framework.

Is it possible to "make up" for an oversight? Yes, but not easily, thanks to the action in statement of foreclosure. You must refer the matter to the official receiver within a very strict time limit: six months from the date of publication of the opening judgment in the BODACC. To obtain this relief from foreclosure, you will need to prove, in accordance with article L. 622-26, either :

That you were not responsible for the delay (for example, you received no information and could not reasonably have known that the proceedings had been initiated - a very difficult condition for a professional to meet).
Or the debtor has deliberately omitted to mention you on the list of creditors that he must submit to the judicial representative.

Obtaining a statement of foreclosure is far from automatic. Vigilance is therefore the best approach.

Immediate prohibitions to be respected

As soon as the opening order is issued, two major prohibitions apply to creditors whose claims arose before that date. Ignoring them can result in severe penalties.

Formal prohibition on receiving payment for a previous claim

This is the cardinal rule laid down by Article L. 622-7 of the French Commercial Code: the debtor is absolutely prohibited from paying any claim arising prior to the opening judgment. This prohibition also applies to the bodies involved in the proceedings (agent, administrator, liquidator).

If, through ignorance or negligence, the debtor pays you an old invoice after the opening judgment, this payment will be considered null and void. The trustee or liquidator would be entitled to demand repayment of the sum received. You would then find yourself having to return the money, while at the same time having to declare your original claim.

There are some very limited exceptions to this principle:

Payment by legal set-off if you yourself are indebted to the company for a "related" debt (having the same contractual origin, for example).
Certain specific payments expressly authorised by the juge-commissaire (for example, to recover essential equipment left as collateral).
Maintenance claims and so-called "super-privileged" wage claims (wages owed before the judgment for a limited period), which benefit from specific priority payment schemes.

Apart from these cases, do not accept any direct payment from the debtor for an old debt after the opening judgment.

Prohibition on initiating or continuing individual legal proceedings

The second major prohibition, set out in Article L. 622-21 of the French Commercial Code, is as follows the cessation or prohibition of all individual lawsuits exercised by prior (and subsequent non-preferential) creditors.

This means that :

All legal actions aimed at ordering the debtor to pay a sum of money (arising prior to the judgment) are immediately suspended if they were in progress, and prohibited if you were planning to launch them. You will have to file a statement of claim.
All enforcement procedures (bank account seizures, seizures of movable or immovable property, etc.) are also halted or prohibited.
Actions to terminate a contract for non-payment of a sum of money (for example, requesting the cancellation of a sale because the price has not been paid) are also paralysed.

The aim is to freeze the liabilities and avoid a "race" by creditors, so that the situation can be managed collectively and in an organised manner.

What actions are still possible?

Actions that do not seek payment of a sum of money or rescission for non-payment. For example: an action to have a contract declared null and void on the grounds of lack of consent, an action to reclaim property that you own (subject to the specific rules on reclaiming property).
Direct actions that the law grants you against a third party (for example, direct action by the subcontractor against the client, or by the victim of damage against the debtor's civil liability insurer). These actions bypass the collective proceedings of the direct debtor.

Declaring your debt and scrupulously complying with payment and prosecution bans are fundamental and technical steps to be taken as soon as any of your debtors is notified of insolvency proceedings. An error or delay can have major financial consequences and permanently compromise your chances of recovery. Given the complexity of these rules and the strict deadlines imposed, the assistance of a lawyer is often essential to secure your rights as a creditor from the outset of the proceedings. Our firm can help you with these procedures and analyse your situation in detail. Contact us to find out more.