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Personal bankruptcy: Exceptions to the discharge of residual debt

Certain claims are excluded from the granting of the discharge of residual debt. These are:

Fines and equivalent liabilities in accordance with section 39, Paragraph 1, Item 3

These are fines, fines, administrative fines and periodic penalty payments as well as side effects of a criminal offense or administrative offense that require a monetary payment.

Interest-free loan to pay for bankruptcy costs

These are loans that you received from your employer, for example, to pay the costs of the bankruptcy proceedings.

Certain mass liabilities arose after the opening of bankruptcy proceedings

Liabilities that have been entered into after the opening of bankruptcy proceedings represent so-called new liabilities and will not be discharged. Refer chapter 7 bankruptcy here.

The same applies under certain conditions to debt that the insolvency administrator could not pay due to lack of assets (check!).

Tort claims arising from a deliberate tort

These are claims that have resulted from a criminal offense or an administrative offense. Specifically, it is, for example, pecuniary damage caused by physical injury, fraud or similar criminal offenses. In particular, this also includes maintenance arrears that have deliberately not been paid in breach of duty or liabilities from taxes if a final conviction for a tax offense according to §§ 370, 373 or § 374 of the tax code has been made. In this way, the legislature wants to ensure that only the honest debtor is released from the residual debt.

Details on exceptions to the discharge of residual debt

The requirements for the registration of such claims are high in view of their continued existence even after the discharge of residual debt has been granted. Pursuant to Section 174 (2) InsO, it must be stated when registering that it is a deliberate unauthorized act. In addition, the facts that led to the crime must be precisely stated.

Liabilities from excluded claims must also be paid after the discharge of remaining debts has been granted!

Therefore, it is particularly important to carefully check claims registrations that are based on a deliberate unauthorized act. The court will inform you after the relevant claims have been registered by sending you the registration documents. Check carefully whether there is actually a tortious claim and, if necessary, file an objection to the characteristic of the offense.

In the run-up to the initiation of insolvency proceedings, if there are tort claims, consideration should be given to submitting an insolvency plan in the insolvency proceedings, with which tortious claims can be “excused” under certain conditions.

Do you need help? Together with you, we will check whether there are any criminal claims in advance of the bankruptcy initiation. For the insolvency procedure, we show you options for defending against criminal claims. In addition, we will discuss with you the way in which tort claims can be dealt with, if necessary.

Deferral of costs

The opening of insolvency proceedings presupposes that the costs of the insolvency proceedings are covered at the time of the opening of insolvency proceedings. Since this is usually not the case, it is possible to apply for a deferral of the procedural costs. For this purpose, a separate application must be made and a declaration about your personal and economic circumstances must be submitted.

Even after the discharge of the remaining debt has been granted, the court will continue to review for four years whether your financial situation has improved and you are able to repay the procedural costs in installments. If there is no improvement, you will be waived after four years.

Enforcement of creditor claims

If one of your customers or another business partner who owes you money becomes insolvent, you have a problem: How do you as a creditor get what you are actually entitled to – or at least part of it (as large as possible)?

The insolvency law should help in this situation is that no assets being dissipated and no creditor is defrauded. In insolvency proceedings, the insolvency administrator should ensure, under the supervision of the bankruptcy court, that the remaining assets are distributed fairly to all creditors.

As a believer, you need to know and exercise your rights.

Claim registration

So that your claims can be taken into account, all claims must be registered with the insolvency administrator in the insolvency table after the opening of insolvency proceedings. Documents substantiating the claim and evidence of any security interests (see below) must be attached. Special issues should be briefly explained.

How we can help you …

We will register the claim for you in the correct form, enclosing the required documents with the insolvency administrator. Before doing this, we will check whether the registration documents give rise to indications of contestable legal acts that enable the insolvency administrator to assert claims against you. In the latter case, we will discuss the risks and other alternative courses of action with you.

Ultimately, we will check for you whether the claim can be based on the characteristics of the offense. In this case, the debt would not be excused for natural persons and would not fall under the discharge of residual debt.

Enforcement of security interests

If your claims are secured by appropriate rights, this may bring you advantages as a creditor in bankruptcy proceedings. Such security interests may have been explicitly agreed or arise by law, e.g. B .:

  • Retention of title
  • extended and expanded reservation of title
  • Transfer by way of security
  • Landlord and contractor lien
  • Assignment of claims
  • Global assignment
  • And much more.

As a creditor with the aforementioned special rights, you are either a creditor entitled to segregation or a creditor entitled to segregation.

As a creditor entitled to segregation (retention of title), you can ask the insolvency administrator to declare whether the contract will be fulfilled. The insolvency administrator only has to submit the declaration immediately after the reporting date (approx. Six weeks after the initiation of the proceedings). Until then, he can use the items if the use does not result in a significant decrease in value in the period up to the reporting date.

If you are entitled to separate creditors (transfer by way of security, landlord and contractor’s lien, assignment of claims, global assignment), the insolvency administrator has the right of exploitation. However, he must surrender and invoice you for the proceeds from the sale, minus the statutory flat-rate fees for assessment and sale. In addition, the insolvency administrator is required to provide information in your favor and there are opportunities to influence the realization. Under certain conditions, the insolvency administrator must also pay you a usage fee.

How we can help you …

We first check what collateral you have. We will then assert the relevant rights for you and ensure that no delays occur at your expense. If the requirements are met, we will ensure that the insolvency administrator pays you compensation for use. In addition, we advise you comprehensively about your options for influencing.

Representation of interests in the creditors ‘meeting and in the (provisional) creditors’ committee as well as in self-administration and insolvency plan proceedings

The important decisions in bankruptcy proceedings are made in the creditors’ meeting. Accordingly, you have the opportunity to influence the further course of the procedure. It also depends on the amount of your claim.

In larger insolvency proceedings, you may be appointed to a (provisional) creditors’ committee as one of the main creditors. This represents the interests of the creditors before there is a creditors’ meeting so that the bankruptcy administrator can act more quickly.

How we can help you …

We represent you vis-à-vis the insolvency administrator and other creditors. In doing so, we ensure that your interests are protected as best as possible in accordance with the formalities of the bankruptcy code.

Submission of applications for refusal in the residual debt discharge procedure

If the debtor has provided false information in the residual debt discharge procedure or has violated his obligations, there is the possibility of filing an application for refusal. If the application is successful, the debtor will not be released from the remaining debt, so your claim will remain. However, all other claims also remain, so that you have to compete with other creditors again. Nevertheless, this may give you the opportunity to make special agreements with the debtor.

How we can help you …

We will examine the possibility of filing a refusal application for you. If necessary, we will inspect the court file and evaluate it for appropriate options. We will then submit a formal application for refusal and will take advantage of the resulting design options.

Enforcement of supplier rights in preliminary and opened insolvency proceedings

The best way to protect your supplier rights in insolvency proceedings is usually to agree with the insolvency administrator as part of a continuation of the business relationship. In this respect, we can refer to the structuring of supplier relationships with insolvent companies.

Pranesh Balaji
Pranesh Balaji Is a Blogger and an SEO professional. Co-founder of Bigmixseo, I have 2 years of experience in SEO & 1 year of Successful blogging @ pantheonuk.org. I have a passion for SEO & Blogging, Affiliate marketing, & to invest in high trading stocks. " Sucess is the ability to go from one failure to another with no loss of Enthusiasm "