Small and large obstacles
Interview with Peshang Hormizyar, insolvency adviser at Zuidweg & Partners
In this podcast we speak with Peshang Hormizyar, insolvency adviser at Zuidweg & Partners, about the verification and stabilization phase.
The stabilization phase is the most intensive phase of the debt assistance process. At the beginning of the process, entrepreneurs mainly want to get rid of the debt problem. Therefore, in the beginning, they have a tendency to fully assume responsibility for debt resolution. We then make it clear that the process can only proceed successfully if we work together. That is why we try to create a situation together with the entrepreneur in the stabilization phase where it can meet its fixed costs and where there are no more new debts. The stabilization phase lasts around 4 months.
Here we encounter small and large obstacles. An example of a small obstacle is if someone is in arrears with paying for health insurance and has been reported to the CAK as a defaulter. In this case, Zuidweg & Partners will enter into talks with these parties to find a solution together that makes it possible for the debtor to withdraw the payment of his or her premium again. A major obstacle that we encounter in almost every case is accounting. Even though entrepreneurs are very strong in their field and know well how to satisfy their customers, they often have little knowledge of accounting. This is not a problem in itself, but it becomes a problem if the entrepreneur does not engage a bookkeeper or accountant to ensure proper accounting. The moment entrepreneurs knock on the door of Zuidweg & Partners, they no longer have the means to pay an accountant. However, proper accounting is a necessary condition for going through a debt counseling process. Because this problem occurs so often, Zuidweg & Partners Stichting Hulp Bij Accounting (SHBB) set up. The SHBB accountants help entrepreneurs with financial problems and organize their accounts quickly and at a low rate.
It is a further important step in the stabilization phase ask for deferred payment from creditors. From this moment on, communication with creditors is taken over by us and the entrepreneur can fully concentrate on his business again. The stabilization phase lasts around 4 months.
After the stabilization phase, the verification phase follows. In this phase we write to all creditors and request the exact amount for each outstanding claim. Even though the entrepreneur usually has an overview of his or her debts, it must be checked for each claim whether and how much VAT, interest, reminder and collection costs are added. The verification phase lasts around 4 months. At the end of the verification phase, we submit a restructuring proposal to the creditors. In this proposal, we explain to creditors how much the entrepreneur can repay from his or her debt over the coming years.