Primary debts
August 16, 2010 | 35,00 EUR | answered by Dr. Dr. Danjel-Philippe Newerla
Dear Sir or Madam,
My private insolvency will end in October 2010. Several pieces of land (grassland, farmland) were taken from the insolvency estate at the beginning of the insolvency proceedings, which according to the insolvency administrator will remain with me. Since I have not committed any wrongdoing during the entire process, I currently assume that the debt discharge will be granted.
I would like to sell the properties after the end of the proceedings. Now my question is: Does the debt discharge also apply to the properties? Can I have the mortgages deleted or simply sell the properties, or can the bank still auction off the properties after the insolvency ends? Do I have the right to have the mortgages deleted? Can I sell the properties and keep the purchase price, or will the bank receive the money?
I would appreciate it if you could provide me with a clear and understandable answer (without paragraphs), as I may have to hand this over to a lawyer anyway?! Thank you for your response.
Heike
Dear Seeker,
Thank you for your inquiry, which I would like to answer as follows:
Regarding 1.) Does the discharge of residual debts also apply to properties?
No, unfortunately the discharge of residual debts generally does not apply to properties or the corresponding mortgage. This is directly stated in the law, specifically in Section 301 (2) of the Insolvency Code, which I have attached for your better understanding:
Section 301 InsO
Effect of the discharge of residual debts
(1) If the discharge of residual debts is granted, it is effective against all insolvency creditors. This also applies to creditors who have not filed their claims.
(2) The rights of insolvency creditors against joint debtors and guarantors of the debtor, as well as the rights of these creditors from a registered encumbrance or from a right that entitles them to separate satisfaction in the insolvency proceedings, are not affected by the discharge of residual debts. However, the debtor is released in the same way as against the insolvency creditors from the joint debtor, the guarantor, or other recourse claimants.
(3) If a creditor is satisfied even though they have no claim to satisfaction due to the discharge of residual debts, this does not create an obligation to return what has been received.
Regarding 2.) Can I have the mortgages deleted or "simply" sell the properties, or can the bank still auction off the properties after the end of the insolvency?
You can certainly sell the properties, but this generally requires approval from the bank. You would then sell the respective property including the mortgage. You would need to reach an agreement with the buyer and the bank, where the buyer also assumes your obligations from the loan agreements.
The bank may only auction off the properties after the insolvency if you do not fulfill your obligations regarding the mortgage.
Regarding 3.) Do I have the right to have the mortgages deleted?
You only have a right to have them deleted if the debt secured by the mortgage (likely the loan) has been fully repaid. As mentioned above, this debt does not simply disappear with the discharge of residual debts.
Regarding 4.) Can I sell the properties and keep the purchase price, or does the bank receive the money? I would appreciate it if you could provide me with a clear and understandable answer (without paragraphs), as I may need to consult a lawyer anyway?!
As mentioned before, you could sell the property, but this would require approval from the bank. You would receive the purchase price, but of course, you would need to continue repaying your obligations to the bank, unless the buyer assumes these obligations, as recommended earlier.
I would like to emphasize the following:
The legal advice I have provided is based solely on the information you have provided. My response is only an initial legal assessment of the situation and cannot replace a comprehensive evaluation of the circumstances. Adding or omitting relevant information can completely change the legal assessment.
I hope my explanations have been helpful. Please feel free to contact me via email or the follow-up option if you have further questions.
I wish you a pleasant Monday afternoon and a great start to the week!
Kind regards from the North Sea coast
Dipl.-Jur. Danjel-Philippe Newerla, Attorney-at-Law
Heilsbergerstr. 16
27580 Bremerhaven
kanzlei.newerla@web.de
Tel. 0471/3088132
Fax. 0471/57774
