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Debt Set-Off in the Netherlands — Your Rights

Do you owe money to someone whilst also having a claim against that same person? You might wonder if you can cancel these out against each other. This is called set-off (verrekening), and it can be a useful way to simplify your financial situation. Set-off is legally regulated in the Netherlands and can help you reach a solution more quickly.

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What's the situation?

Set-off commonly occurs in business relationships, but also between private individuals. Imagine: you still owe money to a contractor, but he hasn't completed his work properly, causing you damage. Instead of pursuing two separate procedures, you may be able to set off your debt against your own claim. This saves time, costs and prevents duplicate procedures. Set-off ensures that debts and claims automatically cancel each other out, up to the amount of the smaller claim.

What does Dutch law say?

Set-off is regulated in the Dutch Civil Code (Burgerlijk Wetboek), specifically in Articles 6:127 to 6:141 BW. These rules determine when set-off is possible and how it works. Dutch law sets clear conditions that must be met before you may set off debts. It's important to understand these conditions properly, as set-off has legal consequences.

1Article 6:127 BW (Dutch Civil Code): Both parties must be each other's debtor and creditor - you must both have money owed to you and owe money
2Article 6:128 BW (Dutch Civil Code): The claims must be 'of the same nature', usually meaning both can be expressed in money
3Article 6:130 BW (Dutch Civil Code): Set-off occurs through a 'declaration' - you must notify the other party that you want to set off

What are your rights in the Netherlands?

If the legal conditions under Dutch law are met, you have the right to apply set-off. This right usually cannot be taken away from you, even through contractual agreements.

1Right to set-off: You may set off claims when both parties are each other's debtor and creditor
2Protection against waiver: The right to set-off usually cannot be contracted away in advance
3Choice of timing: You decide when to apply set-off, as long as both claims exist
4Partial set-off: If the amounts aren't equal, they cancel out up to the amount of the smaller claim

What can you do now?

Follow these steps to correctly apply set-off under Dutch law and protect your rights as an expat in the Netherlands.

1Check that all conditions are fulfilled: both parties must be each other's debtor and creditor
2Draft a written set-off declaration clearly stating which amounts you're setting off
3Send the set-off declaration by registered post to the other party - set-off takes effect from the moment of receipt
4Consult a Dutch lawyer if the other party disputes the set-off or if the situation is legally complex

Template or sample letter

A correct set-off declaration must meet specific requirements to be legally valid under Dutch law. MijnRecht.AI can help you draft a professional set-off declaration that complies with all legal requirements in the Netherlands and optimally protects your rights as an expat.

Where can you get help in the Netherlands?

For questions about set-off, you can contact the Legal Counter (Juridisch Loket) for free legal advice. For disputes about the validity of set-off, the district court (kantonrechter) can make a ruling. For more complex cases, legal assistance from a Dutch lawyer is advisable. Your legal expenses insurance may also help with set-off disputes in the Netherlands.

Conclusion

Set-off can be an effective way to resolve financial disputes in the Netherlands, but pay attention to the correct procedure under Dutch law. With the right approach, you can save time and costs and reach a solution more quickly as an expat.

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