Landmark Belgian Court of Cassation ruling: mortgage holders must renew registration post-bankruptcy

In a recent judgment, the Belgian Court of Cassation ruled that a secured creditor must renew the registration of its mortgage even after the opening of bankruptcy proceedings. Aside from its obvious significance for real estate security, the Court’s ruling may have wider implications for secured creditors and could potentially be interpreted to apply to other forms of security, including the registered movable assets pledge. Secured creditors should see this as a reminder to ensure that perfection requirements continue to be met, be it before or after insolvency.

The Court’s judgment

In recent years, certain practitioners and (lower) courts held the view that secured creditors’ rights “crystallise” on the date of the bankruptcy declaration, thereby locking in creditor rank and preferential rights and removing the need for registration renewal. The Belgian Court of Cassation has now rejected this view, ruling that the opening of bankruptcy proceedings does not “crystallise” the rights of a mortgagee in respect of the mortgaged property. This implies that the mortgagee is responsible to ensure that its mortgage remains validly registered, including after the opening of bankruptcy proceedings. If the mortgagee fails to renew the registration of its mortgage prior to its expiry (30 years after initial registration), it loses its secured status and preferential right to the proceeds from the forced sale of the property.

Although not specifically addressed by the Court, some legal authors have already argued that this logic only applies until the bankruptcy receiver has formally accepted the secured claim (following submission of such claim in the insolvent estate by the secured creditor). In accordance with existing case law, such acceptance of claim would irrevocably confirm the secured creditor’s preferential position in respect of the secured property. This argument has not been explicitly confirmed by the Court of Cassation, and we expect secured creditors will want to take a prudent approach and ensure that registration requirements remain met until they have received final liquidation proceeds (which, in complex bankruptcies, may be months or even years after the acceptance of claim).

Implications for secured creditors

As a Belgian mortgage registration is valid for a period of 30 years, the Court of Cassation’s ruling is likely to impact the position of mortgagees (and secured creditors who benefit from a parallel debt arrangement) in highly protracted bankruptcy situations. Other situations where the problem may arise include (i) long-running mortgage-secured financing arrangements which have been amended/extended over the years without re-taking security and (ii) out-of-court liquidations of property portfolios where bankruptcy is still a probability. 

More generally, this judgment revives the debate around the principle of “separatism” (i.e., the preferred position of secured creditors) in Belgian insolvency law. Among other things, an open question is if the Court’s ruling should also be applied to movable assets pledges registered in the electronic pledge register. As the validity period for electronic pledge registrations is 10 years – and given the widespread use of the “amend & extend” in Belgium (where existing security is maintained and confirmed) – it is likely that the need for renewal of such pledge registrations post-bankruptcy will arise more frequently than is the case for mortgages. 

Freshfields’ restructuring & insolvency and transactional finance experts are following these developments closely and are available for questions.

Source: ECLI:BE:CASS:2025:ARR.20250428.3F.3