What are the consequences for your BKR after debt restructuring and how does this affect your financial future? When you have successfully completed a financial procedure such as the Wet schuldsanering natuurlijke personen (WSNP) or an amicable procedure (MSNP), you might expect to start with a clean slate (the Dutch concept of a schone lei). Although you are legally debt-free, the registration with the Bureau Krediet Registratie (BKR) in Tiel often remains visible for years. This can create obstacles when, for example, you want to take out a new mortgage or apply for a loan. In this article we discuss the legal nuances around your BKR registration after a completed debt restructuring trajectory. We explain which codings are placed, how long they remain visible and under what conditions you can force an early removal of this obstructive registration. Arslan & Arslan Advocaten is ready to assist you to strengthen your legal position and regain your financial freedom sooner.
The impact on your BKR after debt restructuring is an issue that concerns many former debtors. It is a misconception that a successful completion of the WSNP or MSNP automatically leads to the deletion of your data from the Centraal Krediet Informatiesysteem (CKI) of the BKR. In reality, the BKR applies a retention period of five years after the termination of the credit agreement or the restructuring procedure. During these five years the negative special-item codings, such as a code 3 or a code 2, remain visible to participating lenders. This system is designed to protect both the consumer against over-indebtedness and financial institutions against irresponsible credit risks.
In practice many people experience this period as an unreasonable penalty, especially when they have by now put their lives back on track. It is essential to understand that this registration does not mean you will never qualify for credit again, but it does make the acceptance procedure more complex. Lenders will subject your application to a stricter risk assessment. Therefore it is important to act proactively. Read more about negative BKR codings explained to understand what these codes mean.
Difference between WSNP and MSNP registrations
When analysing the consequences for your registration it is crucial to distinguish between the statutory debt restructuring (Wet schuldsanering natuurlijke personen, WSNP) and the amicable debt restructuring (MSNP). Although both trajectories aim to resolve a problematic debt situation, they are registered and handled in different ways. The WSNP is a statutory framework that proceeds via the court, as laid down in the Faillissementswet. When you are admitted to the WSNP, this is reported to the BKR with a specific code. After obtaining the so-called ‘clean slate’ (schone lei) the trajectory ends, but the retention period of five years begins. In an MSNP, that is an amicable trajectory typically via the municipal credit bank, agreements are made with creditors without the intervention of a judge. Here too payment arrears and the start of the debt settlement are registered. The end date of the registration is determined by the moment final discharge has been granted and the debt settlement is formally completed. In both cases the main rule is that the data remain stored for another five years. Nevertheless, the nature of the codings may vary depending on the specific agreements with the creditors. It is advisable to always request your own file from the BKR to verify which information about your specific trajectory has been recorded and whether these data are correct.
The five-year term and the proportionality test
The standard five-year retention period for BKR registrations is not an absolute rule that must be applied unconditionally in all circumstances. Case law in recent years shows a clear shift in which the interests of the consumer can weigh more heavily than the interests of the BKR and the affiliated banks. This is assessed using the so-called proportionality test, based on the Algemene Verordening Gegevensbescherming (AVG) — the Dutch designation for the General Data Protection Regulation (GDPR). This test means that the intrusion into the data subject’s privacy (maintaining the registration) must be proportionate to the purpose served (protection against over-indebtedness and financial stability). If you can demonstrate that your current financial situation is structurally stable and the registration constitutes a disproportionately heavy obstacle to your personal or business development, you can submit a request for early removal. Think of situations where you need a mortgage to buy a house, or when you as a self-employed person need a business loan. The judge or the complaints committee will perform a careful balancing of interests in such cases. Among other things, they will look at the cause of the original debts, the time elapsed since completion of the debt restructuring, and your current income position. For more insight into this process you can consult our article about removing a BKR registration after repayment.
The importance of a recovery coding
A crucial element in restoring your financial reputation after debt restructuring is the placement of the correct recovery coding, also called the H-code. When you have successfully completed your debt restructuring trajectory and obtained the clean slate, your creditors are legally obliged to report the end date of the arrears and the end of the agreement to the BKR. This results in a recovery notification indicating that the problematic situation has been resolved. Unfortunately this sometimes goes wrong in practice. Lenders regularly fail to process the correct end date or the recovery coding in a timely and accurate manner. The absence of this H-code or an incorrect end date has disastrous consequences because to new lenders it appears as if you are still in financial difficulty. The five-year retention period moreover only starts to run from the moment the correct end date is registered. It is therefore of the utmost importance that after your WSNP or MSNP you immediately check whether your BKR overview reflects the actual situation. If you find that the recovery coding is missing or that outstanding balances are wrongly stated, you must immediately demand that the relevant lender correct this incorrect registration. A specialised lawyer can effectively support you in this and, if necessary, take legal steps to compel the correction before the court.
Legal steps for early removal
If the maintenance of the BKR registration after your debt restructuring is disproportionate and demonstrably obstructs you, there are specific legal steps you can take to achieve an early removal. The first step is always to submit a motivated request to the lender who placed the registration. In this request you must extensively substantiate why your individual interest in removal outweighs the general interest of the registration. You must support this with evidence, such as income data, employment contracts, letters of intent for a mortgage, and proof of good financial behaviour since completion of the restructuring. If the lender rejects your request, which often happens at first, you have two follow-up routes. You can file a complaint with the BKR disputes committee via Kifid, or you can start civil proceedings in court. Proceedings at court in the form of a kort geding (summary proceedings) or a bodemprocedure (full merits proceedings) can be effective, especially when there is an urgent interest, such as the approaching conditions precedent of a purchase contract for a house. Judges scrutinise the bank’s refusal against the GDPR and the aforementioned proportionality test. Our experienced lawyers will guide you through every phase of this complex legal process, from drafting the initial request to litigating before the court.
How Arslan & Arslan Advocaten can assist you
The process to fully regain your financial freedom after debt restructuring is complex and requires specific legal expertise. Arslan & Arslan Advocaten has extensive experience in successfully contesting disproportionate BKR registrations. Our approach is characterised by a thorough analysis of your personal situation, in which we not only look at legal feasibility but also at the strategic approach that in your specific case has the greatest chance of success. We take the entire process off your hands. This starts with requesting and analysing your BKR overview and collecting the necessary evidence. We then draft a powerful, tailor-made petition which we submit to the responsible lender. If necessary, we do not hesitate to go to court to enforce your right to a clean slate. We understand that after a difficult debt restructuring trajectory you need peace and certainty. That is why we communicate clearly, transparently and proactively about the progress of your case. We fight for your interests so that you can build your future without obstacles. Whether it concerns correcting incorrect recovery codings or conducting a complex proportionality test before the court, our team of specialised lawyers is ready to assist you with advice and litigation.
Frequently asked questions
When will my BKR registration be deleted after the WSNP?
By default your BKR registration remains visible until five years after the WSNP trajectory is completed and you have obtained the clean slate. Under certain conditions, such as a compelling interest and a structurally stable financial situation, it is possible to force an early removal through legal proceedings based on the proportionality test.
What is an H-coding and why is it important?
An H-coding stands for Herstel (recovery). This code is placed when an arrears position has been resolved or a debt settlement has been successfully completed. It is crucial that this code is recorded correctly and in a timely manner because it indicates that the problematic debt situation has been resolved. The absence of this code significantly hinders your chances of obtaining new credit.
Can I get a mortgage with a BKR registration after debt restructuring?
During the five-year retention period it is virtually impossible to obtain a regular mortgage unless you have the registration removed early. Lenders apply very strict acceptance criteria for former debtors. It is therefore often necessary to take legal steps for removal if you want to buy a house within this period.
Also read
- BKR registration after debt counselling or WSNP
- Removing a BKR registration after repayment – your rights explained
- Negative BKR codings explained – what do they mean?
Need help?
Have you successfully completed your debt restructuring but are you still hampered by a negative BKR registration? Arslan & Arslan Advocaten has the expertise to help you regain your financial freedom sooner. We assess your situation carefully and advise you on the feasibility of an early removal. Contact us for a free initial consultation via https://arslan.nl/contact/ and discover what we can do for you.
Need assistance? Our BKR lawyer will be happy to assist you further. Contact us without obligation for a free first advisory meeting.
