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Carry out consumer insolvency proceedings
Service Description
Insolvency proceedings are court proceedings with the aim of satisfying the creditors of an insolvent debtor equally. To this end, the debtor's assets are liquidated by an insolvency administrator and the proceeds distributed to the creditors. In addition, bona fide debtors are given the opportunity to free themselves from the remaining debts. A distinction is made between consumer insolvency proceedings for private individuals (consumers) and standard insolvency proceedings for self-employed persons and companies.
The consumer insolvency proceedings apply to all natural persons
- who do not exercise or have not exercised any self-employed economic activity, or
- who have been economically active on a self-employed basis, but whose financial circumstances are manageable and against whom there are no claims arising from employment relationships. The financial circumstances are deemed to be manageable if the debtor has fewer than 20 creditors. Claims arising from employment relationships are, in particular, wage tax claims of the tax authorities and claims of social security institutions for contributions of former employees of the debtor.
Process flow
The consumer insolvency procedure is a multi-stage procedure.
The first stage is mandatory out-of-court debt settlement proceedings. This involves a serious attempt to reach an out-of-court settlement with creditors. The settlement attempt must be based on an orderly plan.
The debt settlement plan should be set down in writing. It should contain certain minimum information, without which it is impossible for the creditor to decide whether to agree to the plan.
When drawing up the plan, it may be advisable to consult a suitable body from the outset. This is because the prerequisite for the further implementation of the court proceedings is that a recognized counseling center confirms the failure of the debt settlement plan.
Only if the out-of-court debt settlement procedure has not led to the desired success can the path to court be taken in the second stage. The court proceedings also take place in several stages and begin with the debtor filing for insolvency.
The application to open consumer insolvency proceedings must be accompanied by various documents, including an application for residual debt discharge or a declaration that this should not be applied for. In addition, a certificate from a recognized body on the failure of out-of-court debt settlement, which the body has drawn up on the basis of personal consultation and a detailed examination of the debtor's income and financial circumstances, is required. This must show that an out-of-court debt settlement has been attempted unsuccessfully within the last six months prior to the application for commencement of proceedings. The debt settlement plan must be attached. The main reasons for the failure of the plan must be explained.
If the insolvency petition is admissible, the court regularly conducts further, now judicial debt settlement proceedings on the basis of the submitted debt settlement plan. This is a renewed attempt to reach an agreement with the creditors, supported by the court. The insolvency proceedings are initially suspended for the duration of the court debt settlement proceedings.
If, at the end of the proceedings, no creditor has raised objections or the missing consents have been replaced, the court establishes the acceptance of the debt settlement plan by way of an order. It is then no longer necessary to conduct insolvency proceedings.
However, if the court debt settlement proceedings fail, the insolvency proceedings initiated by the insolvency petition are continued.
The first step is to check whether the costs of the insolvency proceedings are covered or can be deferred at the request of the debtor. Only if this is the case will the insolvency proceedings be continued. If not, the application to open insolvency proceedings is rejected for lack of assets. As a result, the discharge of residual debt cannot be achieved at the end of the proceedings.
The court then further examines whether the insolvency proceedings should be opened. This requires a reason for opening the proceedings. Such a reason exists if the debtor is insolvent or - in the case of a petition filed by the debtor himself - if his insolvency is imminent.
If these requirements are met, the court opens the insolvency proceedings by way of an order and at the same time appoints an insolvency administrator to manage and realize the debtor's assets. Subsequently, the claims of the creditors are first formally determined, and the debtor's assets are liquidated and distributed among the creditors.
This is followed by the so-called good conduct phase. In this phase, the debtor must pay the attachable portion of his income to a trustee. During the period of good conduct, the debtor is also subject to further obligations.
After the end of the good conduct phase, the court decides on the discharge of residual debt if the debtor has previously filed an application for discharge of residual debt.
Who should I contact?
The insolvency court in whose district the debtor's place of residence is located has jurisdiction.
In Thuringia, insolvency courts are located at the district courts of Erfurt, Gera, Meiningen and Mühlhausen.
Competent authority
The examination of the opening of insolvency proceedings shall be carried out by the insolvency court. The local court in whose district a regional court has its seat shall have exclusive jurisdiction for the insolvency proceedings as the insolvency court for the district of that regional court.
Requirements
The following requirements exist for the initiation of consumer insolvency proceedings:
- Insolvency must have occurred or be imminent. This refers to a situation in which the debtor is currently or in the foreseeable future no longer able to meet due payment obligations punctually and in full.
- In addition, there must have been an unsuccessful out-of-court settlement attempt with creditors to settle the debt on the basis of a plan. This must have occurred within the last six months prior to the application to open insolvency proceedings. The attempt is already deemed to have failed if a creditor initiates compulsory enforcement after negotiations on the out-of-court settlement have commenced
Which documents are required?
The following documents are required:
- the written request to open the bankruptcy proceedings
- a certificate issued by a suitable person or body confirming an unsuccessful attempt to reach an out-of-court settlement with creditors on the basis of a plan within the six months preceding the request to open insolvency proceedings. At the same time, the reasons for the failure of the out-of-court settlement shall be stated and the plan shall be attached.
- a debt settlement plan
- lists with information on the debtor'sfinancial situation (list of assets, overview of assets, list of creditors, list of claims), in each case with a declaration on the correctness and completeness of the information provided
- the application for discharge of residual debt or the declaration that this is not being applied for.
Legal basis
Applications / forms
If the opening of insolvency proceedings is refused, the applicant and, under certain circumstances, the debtor shall have the right of immediate appeal. If insolvency proceedings are opened, the debtor has the right of immediate appeal.
What else should I know?
Comments
Different costs are incurred in the individual stages of the proceedings.
The debtor and consumer insolvency counseling centers are usually run by independent charitable organizations and generally offer their services free of charge to debtors.
Court proceedings are subject to a fee. The court costs are generally borne by the debtor. Their amount is regulated in the Court Costs Act (GKG) in conjunction with the associated list of costs and the table of fees. They are based on the amount in dispute, i.e. for the opening proceedings and the conduct of the insolvency proceedings, on the value of the insolvency estate at the time of termination of the proceedings.
In addition, the insolvency administrator's remuneration and the remuneration of the trustee shall also be borne by the debtor. The amount of this remuneration is specified in more detail in the Insolvency Remuneration Ordinance (InsVV).
The insolvency estate is used to cover the costs. As described above, the insolvency proceedings will only be opened if the costs are covered. For the debtor who is unable to meet these costs, there is, under the preconditions of of § 4a InsO there is the possibility of deferring the costs of the proceedings until the granting of residual debt discharge.
Author
The text was automatically translated based on the German content per DeepL.
Technically approved by
TMMJV
Professionally released on
12.10.2021
Source: Zuständigkeitsfinder Thüringen (Linie6Plus)
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