Council goes further on the route for common EU rules for insolvency proceedings

On 30 March, the Council of the European Union  gave the final stamp to a new EU law harmonising key aspects of insolvency rules across the EU. The law will make the EU business environment more attractive to cross-border investors by reducing the complexity of different national insolvency rules.

The new EU-wide rules will maximise the value which creditors can recover from insolvent companies and will increase the efficiency of the insolvency proceedings.

This is an important step towards more efficient and integrated European capital markets that are crucial to the EU’s competitiveness.

The EU common rules for insolvency proceedings include measures for:

• Avoidance action: challenge transactions made by the debtor before the start of the bankruptcy procedure, thus protecting the insolvency estate against the illegitimate removal of assets.
• Tracing assets: allow authorities, at the request of insolvency practitioners, to search bank account registers across the EU to identify assets of insolvent companies.
• Pre-pack proceedings: enable the sale of a company in financial difficulty to be negotiated before the opening of formal proceedings and executed shortly after, while maintaining contracts which are essential for the continuation of the business.
• Directors’ duties: require directors to file for insolvency within three months of financial distress, helping maximise recovery for creditors while allowing flexibility if alternative measures protect creditors equally.
• Creditors’ committees: strengthen the involvement of individual creditors in the proceedings.
• Transparency: require each country to publish clear factsheets on its insolvency laws, which will be made available on the EU’s e-Justice portal.

Next steps 

Member states will have two years and nine months to transpose the directive into national law.

• Directive harmonising certain aspects of insolvency law, 5 December 2025, final compromise text 

Why it matters for FEBIS members

This new EU directive will pave the way for more harmonised insolvency laws in Europe, thus also helping creditors who have cross-border claims to get better representation and better understanding of their rights. For Business information Providers, the enhanced transparency requirements will help them better access insolvency information and thus help build more accurate and updated business reports and credit scores. 

Source: Council of the EU - Press release