Dortmund / Berlin (dpa / tmn) – Illness, unemployment, divorce: There are many reasons why your own financial situation suddenly deteriorates. Those who can no longer pay their bills are actually over-indebted.
Personal bankruptcy can then help you out of trouble. However, only a fraction of the people concerned go to consumer bankruptcy to get rid of their debts.
debt and shame
Lawyer Kai Henning, spokesman for the working group on consumer insolvency at the German Lawyers Association, can only speculate why many people are reluctant to take this step. For a long time, many have tried to tackle their financial problems on their own.
“Being in debt is still a lot of shame,” says Maria Loheide, director of Diakonie Germany. For victims, the decision to open bankruptcy proceedings is therefore very emotional.
“I have to admit that I have failed economically with this step,” says Kai Henning. “But of course I won’t fail due to bankruptcy.” He is a problem solver.
Step by step, the duration of the procedure has been shortened
And how does this personal bankruptcy procedure actually work? The first step is to go to a debt counseling or solicitor. Ines Moers of the Federal Working Group on Debt Counseling advises you to take this step as early as possible. “At the latest when you realize your stomach hurts, when you open the letters.”
Important: A debt counseling service should support you free of charge. If you are injured, you can find the nearest clinic at meine- faults.de. If you prefer to go to a lawyer, you should check in advance what the costs will be. It would be advantageous if the legal costs were borne by legal aid.
Debtors and consultants work together to clarify what debts exist with which creditors. The counseling service or lawyer must try to settle the debt situation out of court.
Breaking the contract – the possibility of submitting a bankruptcy petition
A debt relief proposal is made to creditors, according to which they should generally waive a large proportion of their claims. According to Henning, 90 percent. creditors reject this and the deal collapses. All creditors must consent to avoid bankruptcy proceedings. Rejection will be confirmed by your debt advisor or solicitor. “Only then can you file for bankruptcy,” says Henning.
Before the court opens bankruptcy proceedings, it may re-submit a debt relief plan to creditors, the so-called debt settlement plan. This may make sense if debtors, in the meantime, have collected money from private individuals that can be shared between creditors. The new offer is considered accepted if the majority of creditors agree and the consenting creditors account for more than half the amount owed.
The remaining assets will be used to cover the costs of the proceedings
Bankruptcy proceedings shall be initiated no later than when the second debt relief proposal is rejected. “With the opening, a bankruptcy trustee will be appointed and will be operational for three years,” says Henning. The trustee is responsible for identifying the remaining assets and using them to pay the costs of the proceedings and pay off debts. For example, if debtors still have tangible assets, such as their own property, they can be converted into money.
The debtors are then in the so-called the period of residual debt relief. If they have a fixed income, some of it may be kept by the employer and divided among the creditors.
The amount of the attachable income depends on the amount of net salary and possible maintenance obligations – this can be found in the table of appendices. What debtors do with the portion of the money that cannot be seized is up to them, says Ines Moers.
After three years, the remaining debt is canceled. “The demands will not be removed completely, but they will become imperfect demands,” says Henning. Debtors can still pay their debts voluntarily, but creditors can no longer claim them. The corresponding Schufa entry will be deleted three years after the end of the procedure.
Criminal debts are not forgiven
The amount of the claim at the beginning of the bankruptcy proceedings is irrelevant neither for the proceedings nor for the cancellation of the remaining debt. According to Henning, the only debts remaining after the end of private bankruptcy are criminal claims.
“If you look at it quite rationally, there are actually no downsides to the personal bankruptcy procedure,” says Henning. “Economically, I can get out of debt with very little money.”
However, this process is not a sure success. According to Ines Moers, the preparation itself takes at least six months or a year. Maria Loheide primarily sees a need to improve the number of debt counseling services. There are definitely too few of them, which sometimes results in months of waiting for those affected.
Anyone seeking early help can often avoid the procedure
What are the alternatives to consumer bankruptcy? In the event of insolvency, private individuals are not forced to file for bankruptcy.
Anyone who does not open bankruptcy usually lives with a seizure protection account where a certain amount of deposits are protected from access by creditors. According to Henning, the bailiff comes in every three years and takes over all available assets.
If you seek professional help at an early stage, bankruptcy can often be avoided, says Ines Moers. Then, counter-values such as real estate or a car often appear, which can be used to settle part of the debt. According to Moers, creditors are often willing to talk to you when debt counseling involves comparisons or repayments.
© dpa-infocom, dpa: 220614-99-662254 / 3