An insolvent customer in France rarely announces itself. The first sign is usually a late payment, then an unanswered call, and finally a letter from a court-appointed administrator telling you that your debtor has entered a procédure collective (a collective insolvency procedure). For a foreign company selling into France, that letter often arrives in French, on a short deadline, and under rules that differ sharply from those back home. What you do in the first few weeks usually decides how much you recover.
French insolvency law protects the debtor and its employees first and treats creditors as a queue. Knowing where you stand in that queue — and acting before the deadlines close — is the difference between a paid claim and a written-off invoice.
When is a French company legally insolvent?
The trigger in French law is cessation des paiements: the point at which a company can no longer meet its due debts with the assets immediately available to it. This is a cash-flow test, not a balance-sheet one — a business sitting on valuable but illiquid assets can still be in cessation des paiements if it cannot pay what falls due today.
Once that threshold is crossed, the company or a creditor can bring the matter before the tribunal de commerce, the commercial court that opens and supervises the procedure. The opening judgment fixes the date of insolvency and, importantly for you, starts the clock on the deadlines that follow.
The three French insolvency procedures
Not every insolvency means the end of the business, and the procedure that applies changes what a creditor can realistically expect:
- Sauvegarde (safeguard): a preventive procedure for a company in difficulty but not yet in cessation des paiements. Existing debts are frozen while the business reorganises.
- Redressement judiciaire (judicial reorganisation): opened once the company is in cessation des paiements but may still be saved. A court-appointed administrateur judiciaire runs or supervises the business while a recovery plan is drawn up.
- Liquidation judiciaire (judicial liquidation): used when there is no realistic prospect of recovery. The assets are sold and the proceeds distributed to creditors in a strict statutory order.
As a supplier, you will usually learn which procedure applies from the opening judgment, which is published in the BODACC, the official bulletin of civil and commercial announcements. This is the moment the legal picture stops being a private worry between you and your buyer and becomes a formal process with fixed rules.
Filing your claim: the déclaration de créance
This is the step foreign creditors most often miss. To be paid anything, you must submit a déclaration de créance — a formal statement of your claim — to the mandataire judiciaire, the creditors’ representative appointed by the court. Miss it, and your claim is in principle excluded from the distribution altogether.
The standard deadline is two months from publication of the opening judgment in the BODACC. Creditors based outside mainland France are given a longer window — four months — but that extra time disappears quickly when the notice is in French and the supporting invoices, contracts and statements of account have to be gathered and, often, translated. Treat the day you learn of the procedure as the day to start, not the day to file.
Where you rank: secured versus unsecured creditors
French law pays creditors in a defined order (l’ordre des créanciers). Employees and the costs of the procedure itself come first, followed by secured creditors holding a registered pledge or mortgage. Ordinary suppliers with no security — créanciers chirographaires — sit near the back of the queue, which is why unsecured claims in a liquidation judiciaire are so often paid only in part, or not at all.
Your ranking is largely decided long before the insolvency, by the contract you signed and the security you did or did not take. That is also where a French insolvency or bankruptcy lawyer in France adds the most value: reviewing your exposure while there is still room to improve it.
Retention of title: recovering your goods
If you supplied physical goods, a clause de réserve de propriété (retention of title clause) can be one of the few effective tools left. Properly drafted and accepted before delivery, it keeps ownership of the goods with you until they are paid for — and lets you reclaim any that remain unsold and identifiable in the debtor’s stock. Claims to recover such goods carry their own short deadline, generally three months from the opening judgment, so this too rewards early action.
What to do before insolvency ever hits
The strongest protection is built into the relationship before anything goes wrong:
- Include a valid clause de réserve de propriété in your French sales terms and make sure the buyer accepts it before delivery.
- Set clear payment terms and act on the first overdue invoice — early, structured debt collection in France often recovers what a later insolvency will not.
- Take security or guarantees for significant or recurring exposure.
- Watch for the warning signs — slower payment, part-payments, sudden changes of management — and get advice before the court is involved.
Once a procedure is open, your options narrow to protecting and filing your claim correctly. Understanding how a French business is liquidated helps you judge, realistically, what any distribution might return.
How quickly do you need to act if your French customer is insolvent?
Immediately. The deadlines for filing a déclaration de créance and for reclaiming goods under retention of title run from the opening judgment — not from the day the paperwork reaches you abroad — and a missed deadline is rarely reversible. If you have received notice that a French customer is in a procédure collective, or you suspect one is coming, LysLegal can review your position and file on your behalf. Speak with George Apostel, lawyer at the Paris Bar, through our contact form, by email at [email protected], or by phone on +33 172 605 300. For the wider picture, see our insolvency and restructuring page.