How can a debt relief improve my financial situation?
February 21, 2023 | 45,00 EUR | answered by Erwin Hausdorf
Dear lawyer,
My name is Dietrich Brandes and I am currently facing a difficult financial situation. Due to unforeseen events, I have accumulated high debts and am unable to manage them on my own. I have already tried to reach an agreement with my creditors, but without success.
Currently, I have to spend more money each month to pay off my debts than I actually earn. As a result, I am falling further into debt and see no way out. I am very worried as I fear that I will soon lose control of my financial situation and that my existence is threatened.
My question to you as an expert in insolvency law is: How can a discharge of residual debt improve my financial situation? What are the requirements that need to be met and how long does it usually take for a discharge of residual debt to be granted? What are the effects of a discharge of residual debt on my future, especially on my creditworthiness and my professional situation?
I hope that you can help me in this difficult situation and show me possible solutions. Thank you in advance for your support.
Best regards,
Dietrich Brandes
Dear Mr. Brandes,
Thank you for your inquiry and your trust in my expertise in the field of insolvency law. I am sorry to hear that you are in a financially difficult situation, but I will do my best to help you and show possible solutions.
A discharge of residual debt can indeed help improve your financial situation and allow you to make a fresh start. With a discharge of residual debt, your remaining debts are forgiven after the completion of an insolvency procedure, provided that you meet certain requirements. These requirements include, among others, that you have behaved honestly, have not committed any insolvency crimes, and have not caused your insolvency through grossly negligent or intentional behavior.
To obtain a discharge of residual debt, you must undergo an insolvency procedure. This process usually takes three to six years, depending on the type of procedure (e.g., regular insolvency or consumer insolvency) and your individual situation. During the insolvency procedure, you must regularly disclose your financial situation and comply with the court's requirements.
A discharge of residual debt has various implications for your future. On the positive side, after being granted the discharge of residual debt, you are relieved of your debts and can make a fresh start. However, your creditworthiness will be affected in the coming years, as the discharge of residual debt is noted in the credit bureau and potential creditors are informed. It may therefore become more difficult to obtain loans or credit.
Your professional situation may also be affected by a discharge of residual debt. If you are self-employed or work in certain professions, a discharge of residual debt can have implications, as some professional groups have restrictions on practicing their profession when they receive a discharge of residual debt.
It is important that you consult with an experienced insolvency law attorney to discuss your individual situation and develop possible solutions. I am happy to provide you with personal advice and help you find the best way out of your financial crisis.
Sincerely,
Erwin Hausdorf
