What are the requirements for initiating insolvency proceedings?
August 15, 2022 | 30,00 EUR | answered by Erwin Hausdorf
Dear lawyer,
My name is Clara Voigt and I am currently facing some financial difficulties that have led me to consider filing for insolvency. I have a small business that is not doing as well as before due to the current economic situation. As a result, I have accumulated high debts and no longer see myself able to pay my creditors in a timely manner.
Therefore, my question to you is: What are the requirements for filing for insolvency? I am worried that my creditors may take action against me if I do not act promptly. What steps do I need to take to initiate insolvency proceedings and how does the process generally work? Are there any potential consequences that I should be aware of?
I would be very grateful if you could help me in this difficult situation with your expertise. I urgently need clarity on the options available to me and the best course of action to stabilize my financial situation.
Thank you in advance for your support.
Best regards,
Clara Voigt
Dear Mrs. Voigt,
Thank you for your inquiry regarding the insolvency proceedings. I am sorry to hear that you are in a difficult financial situation. I will now explain in detail the requirements for initiating insolvency proceedings and provide you with steps that you can take.
The requirements for initiating insolvency proceedings are regulated in insolvency law. First, you must be insolvent or over-indebted. Insolvency occurs when you are unable to meet your due payment obligations. Over-indebtedness, on the other hand, occurs when your assets no longer cover your existing liabilities. Additionally, you must file an application for the opening of insolvency proceedings. This application can be filed by yourself or by a creditor.
It is important that you take action early to prevent possible actions by your creditors. Once insolvency readiness has occurred, you should consult an insolvency lawyer to prepare the application for the opening of insolvency proceedings. Your lawyer will assist you in compiling all necessary documents and submitting the application to the relevant insolvency court.
After the application is filed, an insolvency administrator will be appointed to manage and settle the insolvency proceedings. The insolvency administrator will assess the debtor's financial situation, liquidate assets, and distribute the proceeds to creditors. Typically, the insolvency proceedings are concluded with an insolvency plan that regulates the repayment of debts.
It is important that you cooperate with the insolvency administrator during the insolvency proceedings and provide all necessary information. Also, be aware that certain consequences may occur during the insolvency proceedings, such as the denial of debt discharge in case of misconduct.
I hope that this information has been helpful to you and that you now have a better understanding of the insolvency proceedings. If you have any further questions or need assistance, I am at your disposal.
Sincerely,
Erwin Hausdorf
Insolvency Lawyer
