When an overseas client enters insolvency, stop collection immediately, identify the procedure and administrator, and file a proof of claim within the jurisdiction's deadline, typically 2 months in France, 4-6 weeks in Germany.
# Client Filed Bankruptcy Overseas: What Creditors Do Now
Your foreign debtor has entered formal insolvency. Every collection email, call, and lawyer letter stops today. The work now is procedural: identify the proceeding, find the administrator, and file a verified claim before the statutory window closes.
| Question | Short answer |
|---|---|
| First action | Stop all collection pressure. Automatic stay binds you. |
| Who do you file with | The appointed administrator, trustee, or curator, not the debtor |
| Typical filing window | 2 months (France), 4-6 weeks (Germany), varies by opening order |
| Can a foreign creditor file | Yes, in every EU Member State and every UNCITRAL Model Law jurisdiction |
| Main cross-border instruments | EU Regulation 2015/848 and UNCITRAL Model Law 1997 |
| Priority order | Insolvency costs, secured, employee wages, tax, unsecured, equity |
| Missing the window | Claim barred or subordinated, usually fatal |
| Best-case outcome for unsecured | Pro-rata dividend, often in low single digits |
Stop before you act: the automatic stay is not a suggestion
The moment an insolvency court opens proceedings, a moratorium binds every creditor in the world, regardless of where the contract was signed or the invoice was issued. In Germany this is anchored in § 89 InsO. In France it follows publication of the opening judgment in the BODACC and halts all individual enforcement. In the United States it is 11 U.S.C. § 362. In the UK administration, Schedule B1 paragraph 43 of the Insolvency Act 1986 imposes the stay. Continuing to dun the debtor, file fresh enforcement motions, or call the CEO after the opening order is published is not just pointless, it is typically unlawful. German courts treat a post-opening demand as a violation of § 89 InsO and the claim can be refused in the schedule. US courts sanction stay violations under § 362(k). A creditor who ignores the stay exposes itself to costs, potential counterclaims, and reputational damage with the administrator who will decide the creditor's claim. The triage is simple. Pause the dunning workflow. Freeze the external counsel file. Document the invoice stack. Then identify the procedure.The first 72 hours: action checklist
| Hour window | Action | Output |
|---|---|---|
| 0-4 h | Freeze all collection communication to debtor and its officers | Written internal stop order |
| 4-12 h | Confirm procedure: country, court, case number, opening date, procedure type | Case identification memo |
| 12-24 h | Identify the administrator, trustee, curator, or mandataire judiciaire and their postal address | Administrator contact sheet |
| 24-36 h | Assemble the debt file: signed contract, invoices, POD, statement of account, reminder trail, applicable interest clause | Creditor dossier |
| 36-48 h | Identify any retention of title, pledge, bank guarantee, factoring, or credit insurance cover | Security register |
| 48-60 h | Calculate principal, interest, and reimbursable costs as at the opening date | Claim valuation |
| 60-72 h | Engage local insolvency counsel or a cross-border specialist to draft the proof of claim in the court's language | Drafted proof of claim |
| Day 4+ | File with the administrator, obtain receipt, diarise the verification hearing | Filed claim and docket entry |
The cross-border insolvency matrix
Different jurisdictions use different names for the same role. Knowing who holds your file is the difference between a verified claim and a rejected one.| Jurisdiction | Procedure(s) | Filing document | Filed with | Statutory deadline | Recognition instrument |
|---|---|---|---|---|---|
| Germany | Insolvenzverfahren (InsO) | Forderungsanmeldung | Insolvenzverwalter | Set by opening order, typically 4-6 weeks | EU 2015/848 |
| France | Sauvegarde, redressement, liquidation judiciaire | Declaration de creance | Mandataire judiciaire | 2 months from BODACC publication, 4 months for creditors outside France | EU 2015/848 |
| Italy | Concordato preventivo, liquidazione giudiziale | Domanda di ammissione al passivo | Curatore | Set by the decreto di apertura, typically 30 days before the state of liabilities hearing | EU 2015/848 |
| Spain | Concurso de acreedores | Comunicacion de creditos | Administracion concursal | 1 month from BOE publication | EU 2015/848 |
| Netherlands | Faillissement, surseance, WHOA | Vordering ter verificatie | Curator or herstructureringsdeskundige | Set by the rechter-commissaris | EU 2015/848 |
| United Kingdom | Administration, CVA, liquidation | Proof of debt | Administrator, supervisor, or liquidator | Before the dividend declaration | UNCITRAL Model Law (CBIR 2006) |
| United States | Chapter 7, 11, 15 | Proof of claim | Bankruptcy court clerk or claims agent | Bar date set by the court | UNCITRAL Model Law (Chapter 15) |
| UAE | Federal Decree-Law 9/2016, as amended by 35/2021 | Claim submission | Court-appointed trustee | Set by the supervising court | Bilateral, Riyadh Convention |
| Brazil | Recuperacao judicial, falencia (Law 11.101/2005) | Habilitacao de credito | Administrador judicial | 15 days from list publication | UNCITRAL Model Law (Law 14.112/2020) |
| China | Enterprise Bankruptcy Law 2007 | Creditor declaration | Administrator (guanliren) | Set by the court, usually 30-90 days | Reciprocity, limited |
Does bankruptcy follow a debtor abroad?
Yes, when there is a recognition instrument. For EU debtors, Regulation 2015/848 (recast) gives the opening decision automatic recognition across every Member State except Denmark, with main proceedings anchored to the debtor's centre of main interests, the COMI. For non-EU jurisdictions, the UNCITRAL Model Law on Cross-Border Insolvency 1997 has been adopted by roughly 50 jurisdictions including the US (Chapter 15), the UK (Cross-Border Insolvency Regulations 2006), Australia, Canada, Japan, Singapore, South Africa, and most recently Brazil via Law 14.112/2020. The Model Law lets a foreign representative seek recognition of the home proceeding and obtain stay relief in the host country. Most commentary conflates these two instruments. They are not the same. EU 2015/848 is a directly applicable Regulation that operates automatically between Member States, with jurisdiction rules, COMI presumption, and a European Insolvency Register. The Model Law is a template national law, enacted by each adopting country, that requires a court application for recognition. The practical consequence for a creditor: inside the EU, the opening order speaks for itself. Outside the EU, someone has to go to court to get it recognised.Can a foreign creditor file a claim in an overseas insolvency?
Yes. Every EU Member State is obliged under Article 53 of Regulation 2015/848 to let known foreign creditors file claims on equal terms with domestic creditors, and Article 54 requires the administrator to notify known foreign creditors individually. Outside the EU, UNCITRAL Model Law jurisdictions apply the same principle of equal treatment. A foreign creditor in a US Chapter 11 files the standard proof of claim (Form 410). A German creditor in an Italian liquidazione giudiziale files a domanda di ammissione al passivo in Italian. Local language is usually non-negotiable, and the administrator is not obliged to translate.What happens to my debt when a foreign client files insolvency?
Your unsecured commercial claim joins the pool. The priority waterfall in most jurisdictions runs: insolvency expenses, secured claims up to the value of their collateral, employee wages and holiday pay, social security and tax, unsecured trade creditors, subordinated debt, equity. A pro-rata dividend is paid from whatever remains after the senior ranks are satisfied. In practice, unsecured trade creditors in EU liquidations frequently recoup low single-digit percentages of face value. The calculation changes sharply if you have a registered security: retention of title under German law (Eigentumsvorbehalt) if properly documented and the goods are traceable, a UCC-1 filing in the US, a PPSA registration in Canada or Australia, a pledge under French Code civil, or an Italian privilegio speciale. These instruments put you ahead of the unsecured queue for the covered assets. Credit insurance is the other mitigator and is outside the insolvency mechanics entirely: the insurer pays and subrogates into your claim.Information-gain section: the details most articles miss
The Italian Codice della Crisi replaced fallimento
Italy's old fallimento disappeared on 15 July 2022 when the Codice della Crisi d'Impresa e dell'Insolvenza (Legislative Decree 14/2019) came into force. The replacement procedure is liquidazione giudiziale, and the creditor files a domanda di ammissione al passivo with the curatore. Articles that still tell you to "file in the Italian fallimento" are six years out of date.The UAE 2021 amendment widened creditor standing
The UAE Bankruptcy Law (Federal Decree-Law 9/2016) was amended by Decree-Law 35/2021, which clarified creditor standing and tightened the procedural timeline around preventive composition. Foreign creditors can file through local counsel with authenticated powers of attorney.Brazil's SISBAJUD block in recuperacao judicial
The Tribunal de Justica de Sao Paulo has confirmed that the SISBAJUD (formerly BacenJud) electronic bank attachment tool cannot be used against companies under active recuperacao judicial, a carve-out known informally as "Teimosinha". The practical effect: once your Brazilian debtor enters RJ, the electronic freeze option disappears and you are routed into the habilitacao de credito queue with the administrador judicial.German management's 3-week filing duty
Under § 15a InsO, the management of a German debtor must file for insolvency within 3 weeks of the onset of Zahlungsunfahigkeit (illiquidity) or Uberschuldung (over-indebtedness). If you are watching a German client slow down, those three weeks are the window where directors shift from voluntary to compulsory filing, and where late payment can be clawed back later as an anfechtbare Rechtshandlung under §§ 129-147 InsO.When This Is Not For You
This guidance is not appropriate if:
- **The debtor is a consumer, not a business**. Personal bankruptcy regimes, discharge rules, and consumer protection overlays differ materially and are outside this article's scope.
- **The claim is fully secured by credit insurance**. Notify your underwriter first. They run the claim under the policy, not you.
- **Your exposure is under EUR 2,000 total**. The filing and translation cost will usually exceed any realistic dividend.
- **The invoice is already time-barred in the debtor's jurisdiction**. If the local limitation period has run before the proceeding opened, the administrator will reject the claim regardless of filing.
How InterStation Handles a Foreign Insolvency Filing
1. **Hold the collection line**. We pause the operational file the same day we confirm the opening and issue an internal stay notice to all case handlers and counsel. 2. **Verify the procedure and administrator**. We pull the opening order from the official gazette (BODACC, BOE, Bundesanzeiger, Italian Registro Imprese, UK Gazette, US PACER) and confirm the administrator's identity, address, and case reference. 3. **Assemble the creditor dossier to local evidentiary standards**. Contract, invoices, delivery confirmations, statement, interest calculation, any security or retention of title documentation, translated where the administrator requires it. 4. **File the verified claim before the deadline**. We draft and file the Forderungsanmeldung, declaration de creance, domanda di ammissione, proof of debt, or proof of claim through local insolvency counsel in the court's language. 5. **Monitor the proceeding through distribution**. We track the verification hearing, any objection by the administrator, creditor committee appointments, and the interim and final dividends through to closure. Our cross-border collection intelligence work feeds directly into this: when the insolvency risk was flagged early through our [debtor investigation files](/blog/interstation-debtor-investigation-international), the creditor dossier is already half built when the opening order lands.FAQ
Does bankruptcy follow you abroad?
Yes, when a recognition instrument applies. EU Regulation 2015/848 gives automatic recognition across the EU except Denmark. The UNCITRAL Model Law on Cross-Border Insolvency 1997, enacted in about 50 jurisdictions including the US (Chapter 15) and UK (CBIR 2006), lets a foreign representative seek recognition and stay relief in the host court.
Can you declare bankruptcy from overseas?
A company must file where its centre of main interests sits, not where its directors travel. Under Article 3 of EU Regulation 2015/848 main proceedings open at the COMI, with a presumption that the COMI is the registered office. Moving the CEO abroad does not move the COMI.
Can a foreign creditor file a claim in an overseas insolvency?
Yes. Articles 53 and 54 of Regulation 2015/848 require equal treatment and individual notification of known foreign creditors in every EU Member State. UNCITRAL Model Law jurisdictions apply the same equal-treatment principle. The creditor files with the administrator in the court's language before the statutory deadline.
What happens if I miss the proof-of-claim deadline?
Most jurisdictions bar late claims or subordinate them to ranks that receive nothing. Spanish concurso downgrades late filings to subordinated. German InsO allows late filings at the creditor's cost with administrator consent. French declaration deadlines are strict under Code de commerce L622-26 and relief requires a separate court application.