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Debt restructuring and BKR registration

Dynamite BKR registration

Unexpected confluence of circumstances

Mortgage after WSNP

Today there are many consumers who find themselves in the unpleasant situation of being unable to cope with accumulated debts. In most cases, this is not a matter of unwillingness, but mostly a result of very unpleasant and unexpected confluence of circumstances.

A relationship ends, marriage is dissolved or the business is declared bankrupt; anything can happen that suddenly leaves a consumer with sky-high debt. From then on, they have to work very hard to get back on their feet financially, which is certainly not an easy road.

In this blog, we explain the BKR registration you get after completing a debt restructuring program (WSNP or GKB). We also explain if you can get rid of it.

What about BKR registration?

Once a remediation process is started, (if it has not already been done) the entire credit will be claimed. This is a standard condition in virtually every contract. This will result in placement of a code 2 with the BKR, or negative BKR registration.

When a debtor has gone through an amicable debt repayment program (GKB) or WSNP program, the lender will place a code 3 with the BKR. This is done in accordance with BKR regulations and is therefore formally an appropriate action.

The BKR's General Regulations state that even after the WSNP process is completed, a consumer's past problematic debt situation must remain visible to future lenders. An end date is reported on the date that the final discharge is agreed with the creditor or the Clean Slate is granted and from that date it will take another five years before you are released from the code 3. In this way, therefore, you will be reminded of the past for a long time.

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BKR code 3 and clean slate

For consumers, this appears illogical and unreasonable. They do not feel that they can make a fresh start through the Clean Slate, because the code 3 still makes it impossible for them to build a new life. After all, this BKR coding prevents them from taking out new credit and limits their freedom, just as it did before obtaining the Clean Slate.

So what is the point of this trajectory, they ask themselves. Have I not yet been punished enough? Haven't I paid enough for the past? Why have I spent three years on a limb and worked so hard to resolve this properly if I am still being worked against now? Just some of the questions we get asked by our clients. Also a question to which we do not have a ready answer, because we have not drawn up the BKR policy.

However, we do believe that the debtor's commitment to the rehabilitation process must be taken into account. Punishing someone for eight years because there were problems in the previous period is not something we think is right. Through our services we try to guide these people in this process.

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What can you do when you want to apply for a mortgage after completing WSNP?

Despite the fact that you are negatively registered after completing this process, there are possibilities to get rid of BKR codes early. Central Netherlands District Court decided in a WSNP case on February 6, 2018, that despite the fact that there had been a problematic debt situation, given the situation at the time and the interests of the client, it was no longer reasonable to maintain the registration.

We refer you to the article written about this ruling and published on our website. In the specific case, it was a factor that the WSNP process had been successfully completed and that client wanted to take out a mortgage to buy a house. The judge also considered that the client was financially stable again and that she and her partner had an ample joint income, with which the desired mortgage could be borne.

In short, according to the judge in this case the client no longer posed a risk to the financial world and maintaining the registration no longer served any purpose. This first WSNP ruling in relation to BKR codes has created an opening for consumers to get rid of their registration sooner, despite a WSNP trajectory they have followed. The ruling makes clear that also within the judiciary the idea is shared that getting a Clean Slate and at the same time being restricted by a negative BKR registration are diametrically opposed.

Remove negative BKR registration?

Are you curious about the possibilities of removing your negative BKR registrations? We would love to hear from you and then go over the issue with you in a no-obligation consultation.

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