have you already protected your family home from professional creditors?

30 March 2023

by Manon Van Huffelen

Have you already protected your family home from professional creditors?

If you are engaged in an activity on a self-employed basis, no distinction is made between professional assets and private assets. In terms of liability this can be dangerous. For example, if you have a lot of debts, the economic climate is bad, you suffer a claim or you go bankrupt, your creditors may target your private assets. Your family home is also part of the collateral of your professional creditors. To avoid having your family home seized, you can file a Declaration of unseizability (Verklaring van onbeslagbaarheid). But what does this protection option entail?

Have you already protected your family home from professional creditors?

Protection offered by the Declaration of unseizability

The self-employed person submits a Declaration of unseizability to the civil-law notary. The civil-law notary takes a record of this and has it transferred to the Legal Security Office (Kantoor Rechtszekerheid), after which this protection is enforceable against third parties, and therefore also against your professional creditors.

Please note that you only enjoy the protection from the moment you have made the declaration to the civil-law notary. Thus, the unseizability does not apply to debts originating before the declaration was made.

If the professional creditors have debts incurred after the Declaration of unseizability, they can no longer sell your family home to be paid off with the proceeds. However, the professional creditor can still seek a prejudgment attachment of your family home after the Declaration of unseizability.

Which self-employed person can take advantage of this?

The term ‘self-employed person’ here is a broad concept that covers all natural persons and self-employed professionals who exercise a professional activity, without being bound by an employment contract or a status.
In the first instance, these are businesspeople who do not form a company to carry out their self-employed activity and work through sole proprietorships. In addition, self-employed persons who are managers or directors of a company can use it.

People who do set up a company, but where limited liability cannot be enjoyed (for example, general partnerships and limited partnerships), can also make such a declaration.
Finally, the self-employed in a secondary occupation or those who are still active after retirement are also eligible.

Which property is protected?

Only the primary residence is protected. This is where the self-employed person usually lives with their family and where they have their main interests. It does not have to be a property that the self-employed person fully owns. Even if they are a co-owner or usufructuary, they can enjoy the protection for this property.

On the other hand, the self-employed person who has a mere right of use (e.g., rent) cannot have the property in question declared unseizable. Thus, your second residence cannot enjoy this protection.

Which debts are not protected?

You cannot invoke this unseizability for all debts. For debts incurred in private life, creditors will be able to seize the family home. Unseizability also cannot be invoked for so-called mixed debts. It must therefore be professional debts incurred in the exercise of your professional activity.

For debts arising from a crime or from personal liability, the self-employed person cannot invoke unseizability under any circumstances.

What if you also use your family home for your professional activity?

If the family home is also used for the exercise of your professional activity, the following applies:

  • if you use less than 30% of the total area for your occupation, then the entire property may be declared unseizable.
  • if you use 30% or more of the total area for your occupation, then only the portion corresponding to private use can be declared unseizable.

What if you move house?

If the self-employed person sells their home to purchase another home, the unseizability continues to apply to the new home if the following conditions are met:

  • the proceeds from the sale of the home are kept with the civil-law notary. These proceeds benefit from unseizability. 
  • the new home is purchased within one year of the execution of the deed of sale; and 
  • the deed of purchase of the new home explicitly states that it is a reinvestment.

Can you waive the Declaration of unseizability?

The self-employed person can waive the protection, for example, because the bank wants the home as collateral when providing credit to the self-employed person. However, they should be aware that this waiver is a general waiver and thus applies to all professional debts. He cannot choose for which debts he waives the attachment.

What if the self-employed person dies?

If the self-employed person dies, the unseizability does not pass to the heirs of the home. The declaration is revoked in this case and the protection will not apply in the future.

Do you have any questions about this topic? Then contact our experts using the button below