How does the insolvency procedure work?
December 30, 2023 | 40,00 EUR | answered by Erwin Hausdorf
Dear lawyer,
My name is Lukas Voss and I am currently facing a difficult financial situation. After my company got into financial trouble due to the economic consequences of the Corona pandemic, I find myself forced to initiate insolvency proceedings.
At the moment, I feel overwhelmed and uncertain about how exactly the insolvency proceedings will unfold. I have heard that there are different types of insolvency procedures and that each case is considered individually. I wonder what exactly to expect, what steps I need to take, and how long the process will last.
I am also concerned about my employees, my creditors, and my personal financial future. How can I ensure that all parties are treated fairly and that I can start fresh at the end of the process?
Could you please explain to me how the insolvency proceedings will unfold in my case and what possible solutions there are to get out of this difficult situation?
Thank you in advance for your support.
Sincerely,
Lukas Voss
Dear Mr. Voss,
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 caused by the effects of the Corona pandemic on your company. I understand that you may feel overwhelmed and uncertain about how the insolvency process will unfold and what steps you need to take.
First of all, I want to emphasize that you have taken the right step by deciding to initiate insolvency proceedings. In such cases, it is important to seek professional support from a lawyer experienced in insolvency law to ensure that your case is handled appropriately.
It is true that there are different types of insolvency proceedings that may proceed differently depending on individual circumstances. In German insolvency law, a distinction is generally made between regular insolvency and consumer insolvency. Regular insolvency is a procedure intended for companies and self-employed individuals, while consumer insolvency applies to private individuals.
As part of the insolvency process, an insolvency administrator is usually appointed to manage and realize the debtor's assets in order to satisfy the creditors to the best extent possible. Creditor meetings are convened to inform the creditors about the progress of the proceedings and to make decisions.
In your case, it is important that you provide all the necessary documents and information to support the insolvency administrator in their work. Additionally, you should work closely with your lawyer to find the best possible solution for your financial situation.
Regarding the duration of the insolvency proceedings, this can vary depending on the complexity of the case and other factors. Typically, insolvency proceedings for companies last about three to five years, while consumer insolvency proceedings usually last six years.
To ensure that all parties are treated fairly, it is important that you deal with the insolvency administrator and your creditors in a transparent and cooperative manner. It is also advisable to communicate early with your employees and inform them about the situation.
In terms of your personal financial future, an insolvency proceeding can also offer the opportunity to make a fresh start and recover in the long term. It is important to monitor your personal finances during the process and seek professional advice if necessary to secure your financial future.
In summary, while insolvency proceedings can be a challenging time, with the right support and a clear strategy, you can come out of this difficult situation. I am here to support you throughout the process and help you find solutions.
Please do not hesitate to contact me if you have any further questions or need additional support.
Best regards,
Erwin Hausdorf
Insolvency Lawyer
