Borgmiddelen

Borgmiddelen, also referred to as collateral in an international context, are assets or guarantees provided by a debtor to secure the performance of an obligation. In Dutch civil law, the term is governed primarily by articles 7:6 and 7:7 of the Burgerlijk Wetboek, which outline the general principles of performance guarantees and the types of assets that may be accepted as security.

Common categories of borgmiddelen include monetary deposits, securities, real estate, equipment, warranties, and personal guarantees. Each type carries specific legal requirements: a monetary deposit must be held in an interest-bearing account; real estate collateral must be registered in the Kadaster; personal guarantees are subject to the debtor’s creditworthiness and may be limited by administrative regulations. In commercial contexts, a banker’s letter of credit can also function as a borgmiddel, providing a third‑party guarantee that the creditor will be paid.

The legal framework ensures that borgmiddelen are executed only after a written agreement, and the creditor must act in good faith when enforcing the collateral. Dutch law prohibits self‑sealing of certain assets, and the creditor is required to evaluate whether the value of the borgmiddel adequately covers the potential loss. Remedies available to creditors include executory sale, usage of the property, or the claiming of deposited funds.

The use of borgmiddelen is widespread across finance, insurance, trade, and real estate transactions as a risk mitigation tool. By providing a tangible security interest, parties can reduce default risk, facilitate credit lines, and improve liquidity for the debtor while protecting creditor rights.