Can I incur new debts during insolvency?
February 18, 2023 | 40,00 EUR | answered by Emma Fischer
Dear bankruptcy attorney,
My name is Maria Gerdes and I am currently involved in a bankruptcy proceeding. In my financial situation, I am under great pressure and I am wondering if it is allowed for me to incur new debts during the bankruptcy.
The reason for my bankruptcy is a series of unfortunate circumstances, such as a lengthy hospital stay with high medical costs and the loss of my job due to the current economic situation. I have already dealt extensively with my debts and am trying to fulfill my financial obligations, but unexpected expenses keep arising.
I am worried that without the ability to incur new debts, I will not be able to cover my ongoing expenses and support myself. At the same time, I am concerned that taking on more debt could jeopardize my bankruptcy proceeding.
Therefore, I am wondering if it is allowed in my situation to incur new debts to improve my financial situation and how this would affect my ongoing bankruptcy proceeding. Are there alternative solutions to manage my financial problems without jeopardizing my bankruptcy proceeding?
I thank you in advance for your support and advice on this urgent matter.
Sincerely,
Maria Gerdes
Dear Mrs. Gerdes,
Thank you for your inquiry regarding the possibility of taking on new debts during an ongoing insolvency proceeding. I understand that you are in a difficult financial situation and are looking for solutions to secure your livelihood.
In general, it is not advisable to take on new debts during an insolvency proceeding, as this can complicate the situation and jeopardize the insolvency process. Taking on new debts could be seen as a deterioration of your financial situation and lead to problems with the insolvency proceeding.
It is important that you stick to the established plan during the insolvency proceeding and do not incur additional debts. It is important that you speak with your insolvency administrator or your attorney to discuss any possible exceptions or alternatives.
However, there are certain situations in which it is possible to take on new debts during an insolvency proceeding. For example, if they are necessary expenses essential for your livelihood, such as rent, food, and medical costs. It is important that you document these expenses accurately and can prove that they were unavoidable.
I recommend that you get in touch with your insolvency administrator or your attorney to discuss your specific situation and find possible solutions. There are often alternative ways to manage financial problems without having to take on new debts. Your insolvency administrator can inform you about potential options and help you create a plan to improve your financial situation.
I strongly advise you to seek professional advice to ensure you receive the best possible support. Please do not hesitate to contact me if you have any further questions or need assistance.
Sincerely,
Emma Fischer
Insolvency Lawyer
