Can I as a private individual also file for insolvency?
April 19, 2023 | 35,00 EUR | answered by Helma Beck
Dear Bankruptcy Attorney,
My name is Paula Lehmann and I am currently facing a difficult financial situation. Due to various unforeseen events such as unemployment and medical expenses, I have accumulated high debts and now I am faced with the question of whether I can file for personal bankruptcy.
My current situation is characterized by an overdrawn checking account, unpaid bills and reminders that have piled up in the last few months. I am very concerned about my financial future and wonder if it is possible to file for personal bankruptcy to clear my debts and start fresh.
I have already tried to repay my debts in installments, but the monthly burdens exceed my financial capabilities. Therefore, I am looking for a long-term solution to manage my debts and stabilize my financial situation.
Can you please explain to me if and under what conditions I can file for personal bankruptcy? What steps would I need to take and what consequences would personal bankruptcy have for me? Are there alternative approaches that I could consider before taking the step to file for bankruptcy?
I thank you in advance for your support and expertise in this difficult matter.
Sincerely,
Paula Lehmann
Dear Mrs. Lehmann,
Thank you for your message and your trust in my expertise in the field of insolvency law. I am sorry to hear that you are in a difficult financial situation, but it is important that you actively address your situation and seek solutions.
First of all, it is generally possible to file for bankruptcy as a private individual. This is referred to as consumer bankruptcy or private bankruptcy. However, certain requirements must be met. One of these requirements is that you are unable to pay, meaning that you are no longer able to settle your due debts. Additionally, you must have attempted an out-of-court settlement with your creditors before filing for bankruptcy.
To apply for private bankruptcy, you must submit an application to the competent insolvency court. This application includes a comprehensive statement of your assets, income and expenses, as well as your debts. After reviewing your application, the court will decide whether the conditions for opening insolvency proceedings are met.
In the case of private bankruptcy, an insolvency administrator will be appointed to manage your assets and serve the creditors. During the insolvency proceedings, you must regularly provide information about your financial situation and disclose your income to the insolvency administrator. Depending on your income, you may be subject to garnishment for a certain period during the insolvency.
Private bankruptcy also has an impact on your creditworthiness, as the insolvency note will be entered in the Schufa for a certain period of time. This may negatively affect your ability to take out new loans or enter into contracts.
Before proceeding with bankruptcy filing, I recommend that you explore all possible alternatives. This includes seeking advice from a debt counseling agency, which can show you various ways to settle your debts. An out-of-court agreement with your creditors can also be a solution in some cases.
I hope that this information is helpful to you and I am available for any further questions you may have. Please do not hesitate to contact me if you need further assistance.
Best regards,
Helma Beck
