What happens to my property in the event of insolvency?
October 13, 2023 | 40,00 EUR | answered by Emma Fischer
Dear lawyer,
My name is Carsten Halbscheffel and I am currently facing a difficult situation that is causing me a lot of concern. I have decided to declare bankruptcy as I am no longer able to handle my debts on my own. Now I am very worried about my property and wondering what will happen to it in the event of bankruptcy.
The current situation is as follows: I am self-employed and have my own business. Unfortunately, my revenues have decreased significantly in the past few months and I am facing a pile of unpaid bills. I have already spoken with a bankruptcy advisor who has advised me to file for bankruptcy in order to satisfy my creditors.
So, the current state of affairs is that I am facing bankruptcy and do not know what will happen to my property. I own a property, vehicles, and valuables that are very dear to me. It is hard for me to imagine that I could potentially lose these things in the worst-case scenario.
My concerns mainly revolve around whether my property could be seized or sold to pay off my debts. I wonder if I will still be able to live in my property after bankruptcy and if I will be able to keep my vehicles.
Therefore, my question to you as an expert in bankruptcy law is: What will happen to my property in the event of bankruptcy? Are there ways to protect or retain my property? I would greatly appreciate a detailed consultation on this matter.
Sincerely,
Carsten Halbscheffel
Dear Mr. Halbscheffel,
Thank you for your trust and your open question regarding your insolvency situation. It is understandable that you are worried about your property, especially when it comes to important assets such as real estate, vehicles, and valuables. I would like to explain in detail what can happen to your property in case of insolvency and what options you have to protect it.
First of all, it is important to know that in the insolvency process, the entire assets of the debtor (you in this case) belong to the insolvency estate. This means that in principle, your real estate, vehicles, and valuables can be used for liquidation to satisfy the creditors' claims. This is usually done by an insolvency administrator who manages the assets and potentially sells them.
However, there are exceptions and ways to protect your property. On the one hand, there are certain items that are exempt from seizure and thus do not belong to the insolvency estate. These include household goods, clothing, tools for work, and a reasonable vehicle. These items usually cannot be seized or sold.
Furthermore, there is the option to protect your real estate through a so-called "real estate realization clause." In this case, it is stipulated in the insolvency plan that the property should not be sold, but that you can continue to live in it. However, this can vary from case to case and depends on various factors.
It is therefore advisable to consult an experienced insolvency lawyer early on to analyze your individual situation and discuss possible protective measures. A lawyer can also help you create an insolvency plan that best protects your interests and your property.
I hope this information has been helpful to you and has provided some clarity regarding your property in the event of insolvency. If you have any further questions, please do not hesitate to contact me.
Sincerely,
Emma Fischer, Insolvency Lawyer
