Insolvency proceedings are court proceedings. It serves to liquidate a debtor's assets and distribute the proceeds to his creditors. A different arrangement can be made in an insolvency plan, in particular for the preservation of a company.

Insolvency proceedings are opened only upon application. The petition may be filed by the debtor or the creditors. The debtor's petition must be accompanied by a list of creditors and their claims. If the debtor has a business operation which has not been discontinued, certain information - e.g. the highest claims - shall be specially indicated in the list.

Insolvency proceedings may be opened against the assets of any natural person or legal entity. Insolvency proceedings may also be opened, inter alia, in respect of the assets of a company without legal personality (e.g. general partnership, limited partnership and civil law partnership). In addition to creditors, any member of the representative body and, in the case of a company without legal personality or a partnership limited by shares, any personally liable partner, shall be entitled to file a petition for commencement of insolvency proceedings in respect of the assets of a legal entity or a company without legal personality.

The commencement of insolvency proceedings is subject to the existence of a ground for commencement. A general ground for opening insolvency proceedings is the debtor's inability to pay. If the debtor applies for the opening of insolvency proceedings, an opening can also take place if the debtor's insolvency is imminent. In the case of a legal entity, overindebtedness is also a ground for opening.

The insolvency court shall reject the application for commencement of insolvency proceedings if the debtor's assets are not expected to be sufficient to cover the costs of the proceedings. If the insolvency proceedings are opened, the insolvency court appoints an insolvency administrator and requests the creditors to file their claims with the insolvency administrator within a certain period.