Debt management plans (DPMs) under the Act on Debt Restructuring Natural Persons (Wsnp) are imposed by Dutch courts, if all other attempts to settle problematic debts have failed. The DPM scheme was introduced in December 1998 as part of the Bankruptcy Act. A DPM can prevent people from being pursued on account of their debts for years on end.
DPMs are intended for private individuals and self-employed who can no longer meet their financial obligations. They can – under certain conditions – submit a request to have their debts restructured. The debtor pays back as much as he/she possibly can, according to a strict scheme and under supervision of a receiver. Under the Bankruptcy Act, creditors can be forced to cooperate. After a period of usually three years, the debtor can make a restart with a clean slate.
Prior to being admitted to the Wsnp, an attempt has to be made to settle the debt amicably. This procedure involves the Municipal Credit Bank or the Municipal Social Service. These organisations make a list of the creditors and debt amounts involved and try to reach a settlement with the creditors. If all creditors accept the offer, the amicable route has been successful. If one or more creditors reject the offer, the amicable route has failed. The debt relief counsellor subsequently submits a request to be admitted to the Wsnp. During a court session, the judge will ask for additional information and explain what obligations have to be met. The debtor will also be informed whether he/she is admitted. There is an alternative way to be admitted to the Wsnp: the debtor can file for bankruptcy at the court. This procedure can give direct access to the Wsnp.