EU Insolvency Law: Harmonisation approaches the finish line

Introduction

On 10 March 2026, the European Parliament formally approved the long-awaited Directive harmonising certain aspects of insolvency law (the Directive) which will now be sent to the Council for final approval. The Council is expected to formally adopt the Directive by the end of this month after which it can be published in the Official Journal of the EU and enter into force. The Directive covers five pillars:

1. Avoidance actions
2. Pre-pack proceedings
3. Duty to file for insolvency
4. Creditors’ Committees
5. Asset tracing

The aim of the Directive is to work towards harmonisation of these pillars of substantive insolvency law across EU Member States, not only in cross-border cases but also in domestic cases. After the Directive enters into force Member States will have two years and nine months to transpose it into national law. 

Proposed by the Commission in 2022 (as we covered here) the Directive aims to provide for new minimum rules to improve predictability of insolvency proceedings in each member state for creditors and investors; it does not set out a standard set of harmonised insolvency rules that each member state must enact in the same way. Instead, the Directive allows Member States to implement (or keep) rules that go above the standard the Directive sets, as long as it provides for greater protection for the general body of creditors. 

What’s next?

The proposal will now be sent to the Council for approval. If no amendments are made by the Council, the Directive will be adopted. Afterwards, the Directive will be published in the Official Journal and will enter into force the day after publication. 

After the entry into force of the Directive Member states will have two years and nine months to transpose the Directive into national law.

For a more detailed explanation of the Directive's key pillars and their main implications for Germany, the Netherlands, France and Spain, please read our briefing here.  For the European Parliament text see here.