Declaring claims in insolvency proceedings

What is a claims declaration?

When a company in difficulty is the subject of collective proceedings - safeguard, receivership or compulsory liquidation - its creditors can no longer pursue it individually. Legal proceedings are frozen and enforcement suspended. To have a chance of being paid, each creditor must contact the judicial representative or liquidator by means of a specific act: the declaration of claims.

It is a formal act, subject to strict deadlines and content requirements. The Court of Cassation recognises that it has a special legal status: the declaration of claims is equivalent to a legal claim, which interrupts the statute of limitations and produces the effects attached to documents initiating proceedings (Cass. com., case law in force since the law of 1985). This assimilation is not anecdotal - it means that errors made at the time of the declaration can have definitive consequences on the creditor's right.

Article L622-24 of the French Commercial Code sets out the general rule. It applies to safeguard proceedings. Articles L631-14 and L641-3 refer to receivership and compulsory liquidation proceedings respectively: the same rules, the same deadlines, the same penalties - regardless of the proceedings initiated against the debtor company.

A formality with definitive effects

What distinguishes the declaration of claims from most procedural acts is the definitive nature of its effects. A creditor who has not declared his claim within the legal time limit is foreclosed - his claim is inadmissible. They are not included in distributions, do not receive any dividends, and do not recover their right to take individual legal action against the debtor after closure. The penalty is severe, and not proportional to the delay.

The only recourse is to lift the foreclosure, subject to specific conditions and a new deadline. This is why you need to pay particular attention to the declaration of claims as soon as you learn that a customer, tenant or debtor is in debt collection proceedings.

Who must declare a claim?

The general rule: all previous creditors

The obligation is universal for creditors whose claims arose prior to the opening of the insolvency proceedings. The nature of the claim, its amount and its origin (contract, tort, quasi-contract) are irrelevant: as long as it existed before the insolvency proceedings were opened, it must be declared. A supplier with unpaid invoices, a landlord with overdue rent, a bank that has granted a loan, a subcontractor for work that has been carried out: they are all affected.

The declaration may be made by the creditor himself or by any agent or representative of his choice - lawyer, chartered accountant, financial manager, debt collector. The creditor may also ratify a declaration made on his behalf by a third party, as long as the official receiver has not yet ruled on the admission of the claim.

One point not to be overlooked: when the debtor himself has brought your claim to the attention of the judicial representative, he is presumed to have acted on your behalf. But this presumption does not exempt you from making a declaration. This presumption applies as long as you have not sent in your own declaration - and if you do not do so within the legal time limit, the time limit will apply.

Exempt creditors

Three categories are exempt from the reporting obligation:

• Employees. The AGS (Association pour la gestion du régime de garantie des créances des salariés - Association for the management of the employee claims guarantee scheme) automatically recognises their wage claims (wages, termination payments, paid leave) on the basis of the statements drawn up by the trustee or liquidator. There is nothing for the employee to do - except to contest an incomplete statement within a specific timeframe.
• Maintenance creditors. Article L622-24, final paragraph, expressly excludes maintenance claims (alimony, compensatory allowance for successive performance). These are paid outside the collective proceedings.
• Creditors under article L622-17. Receivables that are duly incurred after the opening judgment, for the purposes of the proceedings or the observation period, or in consideration for a service provided to the debtor for its day-to-day business, benefit from a preferential system of payment on the due date. They are not subject to declaration in accordance with article L622-24.

What claims must be declared?

The obligation applies to all claims arising prior to the opening judgment, without restriction as to their nature or certainty. The law is explicit: «Claims must be declared even if they have not been established by an instrument. Claims whose amount has not yet been definitively determined shall be declared on the basis of an evaluation».»

This covers in particular:

• The term receivables A debt that is not yet due on the date of the opening judgment must still be declared - for the full amount, with an indication of the due date.
• The disputed claims A current dispute over the existence or amount of the claim does not exempt you from declaring it. You declare the amount claimed, specifying that it is disputed.
• The conditional debts A claim whose realisation depends on a future event (for example, a first demand guarantee that may be called) must be declared for its estimated amount.
• The foreign currency receivables They are converted into euros at the exchange rate on the date of the opening judgment.

The Court of Cassation has clarified the regime for ongoing contracts that are pursued by the insolvency administrator and then terminated: the creditor of such a contract must declare any termination indemnity within a special period of one month from notification of the termination by the administrator (Cass. com., 5 Nov. 2013, no. 12-20.263). This special period is independent of the general two-month period.

How do I make a claim?

CERFA form no. 10021*01

There is no legal requirement to use the official form for non-professional creditors, but it is strongly recommended. CERFA form no. 10021*01, available on the website of the clerk of the relevant commercial court, structures the declaration and covers all the information required by article L622-25. A professional creditor who sends a simple headed letter can perfectly well meet the legal requirements - as long as no element is omitted.

Mandatory information

Particular attention should be paid to collateral. If your claim is secured by a mortgage, pledge or any other security mechanism, you must indicate its nature and basis in the declaration. Omitting the security does not cause the claim to be lost, but it does render the security unenforceable in the proceedings - which means that you will be treated as an ordinary unsecured creditor, without the benefit of your preferential ranking. Mortgage creditors who forget to mention their security thus wipe out years of registration formalities. This is one of the most costly pitfalls of debt registration.

Who to send the declaration to and how

In safeguard proceedings and receivership, the declaration is sent to the judicial representative appointed by the court. In the event of compulsory liquidation, the liquidator receives the declarations.

The opening judgment published in the BODACC indicates the name and address of the trustee or liquidator. You can also obtain this information from the registry of the business court that opened the proceedings, or on the Infogreffe portal.

The declaration may be sent by registered letter with acknowledgement of receipt - this is the surest way of establishing proof of dispatch and time limit. It can also be delivered directly to the trustee or liquidator against a receipt. Some trustee firms also accept electronic declarations via their dedicated platforms. The commercial court publishes information on its website about the proceedings opened in its jurisdiction.

Reporting deadlines: the rules you need to know

The general two-month deadline

Article R622-24 of the French Commercial Code sets the regulatory deadline: two months from publication of the opening judgment in the BODACC (Bulletin officiel des annonces civiles et commerciales, available free of charge on bodacc.fr). This period applies without distinction to safeguard, receivership and compulsory liquidation.

Two months is a short time. Collecting debts from a bankrupt company requires an immediate response. And the period runs even if you are unaware of the existence of the proceedings. The Court of Cassation has made it clear that failure by a creditor established abroad to be aware that the proceedings have been opened does not suspend the time limit for making a declaration (Cass. com., 16 Nov. 2010, no. 09-16.572). Publication in the BODACC is binding on all parties.

Special rules depending on the creditor's situation

There are several exceptions to the general time limit:

For creditors holding a published security (mortgage, registered pledge, etc.) or bound to the debtor by a published contract, the time limit only runs from receipt of the personal notice that the agent must send them. But beware: if this warning is received before publication in the BODACC, the ordinary law period from publication in the BODACC applies (Cass. com., established case law). The mechanism protects secured creditors, but does not exempt them from remaining vigilant.

What happens after the declaration?

Verification by the judicial representative

Once the declarations have been received, the court-appointed agent - or liquidator - verifies the claims. He examines the existence of each claim, its amount, its nature and the securities attached to it. He must notify the creditor of his proposals for admission or rejection by registered letter.

The creditor then has thirty days to respond and, if necessary, contest the proposal (art. L622-27 C.com). This period runs from receipt of the letter - not from the date it is sent. If the creditor does not respond within thirty days, he may not subsequently contest the trustee's proposal. A notable exception: where proceedings on the merits were already underway on the day the proceedings were opened, Article L622-27 does not apply (Cass. com., 5 Sept. 2018, no. 17-14.960).

Admission, rejection and challenge

On the basis of the creditors' verifications and responses, the official receiver rules on each disputed claim: he accepts it, partially accepts it or rejects it. His decision may be appealed to the court. If no objection has been raised, the trustee may draw up a statement of claims for claims that have been admitted without objection.

The admission decision has the relative authority of res judicata. It does not deprive the enforcement judge of his power to examine the unfairness of a clause in the contract concerned, particularly in the event of a subsequent seizure of property (Cass. com., 8 Feb. 2023, no. 21-17.763). Admission as a debtor is not therefore a definitive blank check on all the terms and conditions of the claim.

Statement of receivables and distributions

At the end of the verification, the trustee draws up a statement of the claims declared, with his proposals for admission or rejection. This statement is filed with the registry of the Business Court and may be consulted by any person with an interest in it. This document is the basis for future distributions: only admitted claims participate in distributions.

Time-barring, unenforceability and relief from time-barring

Foreclosure: you are not eligible for distribution

A creditor who has not made a declaration within the legal deadline is precluded from making a claim. In concrete terms, they are not entitled to any distributions or dividends. They do not participate in any distributions, do not receive anything when the liquidation proceedings are closed, and cannot recover their individual right of action against the debtor after closure - unless they have been granted relief from the foreclosure.

Unenforceability: even a declared claim can pose a problem

Since the Order of 15 September 2021 (in force for proceedings commenced on or after 1 October 2021), an irregular declaration - whether incomplete or incorrectly filed - may now be declared unenforceable by the official receiver, pursuant to article L624-2 paragraph 1 of the French Commercial Code. Prior to this reform, only failure to declare a claim led to foreclosure; a claim that was incorrectly declared was simply irregular without such a severe sanction.

Academic writers have pointed to a paradoxical asymmetry: the author of an undeclared claim could be treated better than the author of an incorrectly declared claim, in particular because the undeclared creditor retained the possibility of recovering his claim in the event of resolution of the plan (Prof. Pétel, Act. proc. coll. 2021). The Order of 2021 sought to correct this situation by giving the official receiver the power to declare the unenforceability of an improperly declared claim.

The lifting of the foreclosure: a second chance subject to conditions

A creditor who is foreclosed has a remedy: an action for relief from foreclosure, provided for in article L622-26 of the French Commercial Code. This action is brought before the juge-commissaire, who has exclusive jurisdiction.

There are two cumulative conditions: the creditor must not be responsible for the default - the creditor must show that it was impossible for him to declare within the time limit, or that his default resulted from an omission by the debtor when drawing up the list of his creditors. Simple negligence, an oversight, an agent who did not follow up the case: none of these situations constitutes an impossibility within the meaning of the law.

The action must be brought within a fixed period of six months from publication of the opening judgment in the BODACC. This period may not be extended, unless the creditor can prove that it was absolutely impossible for him to know of the existence of his claim before it expired: in this exceptional case, the period runs from the date on which it is established that he could no longer have been unaware of the existence of his claim (art. L622-26, last paragraph, amended by Order 2021-1193).

If the official receiver grants relief from the foreclosure, the creditor has half the time (one month instead of two) to make his declaration, with this period running from the date of notification of the relief decision. In this case, the creditor only participates in distributions made subsequent to his request.

Pitfalls to avoid

Declaring claims is a seemingly straightforward formality, but there are many costly mistakes to be made. Here are the situations we encounter most frequently.

Forgetting to mention safety. This is the most serious mistake for secured creditors. A banker who declares his mortgage claim without indicating the nature and basis of the mortgage will be admitted to the liabilities on an unsecured basis - he loses his preferential rank, his preferential right over the sale price of the property. The omitted security becomes unenforceable in the proceedings, when it could have made all the difference in the distributions. Systematically check that each security interest is described precisely.

Do not monitor the BODACC. The two-month period begins as soon as the judgement is published in the BODACC, not as soon as you learn of the proceedings. If your customer files for bankruptcy on a Friday and the opening judgment is published in the BODACC the following week, the time limit runs - even if you were not informed directly. For all your major debtors, regular monitoring of the BODACC (bodacc.fr) or an alert via a third-party service is essential.

Rely on the debtor's declaration. Article L622-24 provides that when the debtor has brought the claim to the attention of the agent, he is presumed to have acted on behalf of the creditor until the latter has sent his own declaration. This presumption is temporary and conditional. It does not protect you if the time limit expires without you having made a declaration. Never rely on the list provided by the debtor.

Declaring an incomplete or inaccurate amount. Since the Order of 2021, an irregular declaration may be declared unenforceable. Make sure that you include not only the capital owed on the day of the opening judgment, but also accrued interest, ancillary sums and sums due in the future if the claim is for a fixed term. A hasty declaration, made the day before the deadline, is often an incomplete declaration.

Ignore the reduced time limit after the foreclosure has been lifted. If you obtain a statement of foreclosure from the official receiver, the time limit for filing is halved - to one month. This period runs from the date of notification of the decision. A creditor who obtains the relief and lets this new deadline pass is in a worse situation than before: he or she has embarked on a costly procedure without any benefit.

Believing that a claim that is not on the debtor's list is protected. The Court of Cassation has ruled that ignorance of the existence of insolvency proceedings in France does not in itself constitute an impossibility of action that would allow a creditor established abroad to extend the deadline for raising the debtor's claim (Cass. com., 16 Nov. 2010, no. 09-16.572). French rules also apply to foreign creditors, with no derogation linked to their ignorance of the proceedings.