The private bankruptcy (also: “consumer bankruptcy procedure”) is the judicial debt settlement for people who do not do self-employment. After the so-called good conduct period has passed, the remaining debt is released – the debts are therefore deleted. You can read more about bankruptcy here in chapter 7 bankruptcy.
Many of our clients report that they are reluctant to take the step into personal bankruptcy. The topic is mostly pushed aside, partly because it is relatively complex. For this reason, our law firm offers you a free initial telephone consultation. It is used to assess your individual debt situation.
On this page we have put together all the important information about personal bankruptcy for you.
Safe debt relief: In insolvency proceedings, it does not matter how high the debts are or how many creditors a debtor has (see Section 301 InsO). The bankruptcy is the basis for a debt-free new beginning.
Duration: Now only three years: For all proceedings since October 1st, 2020, the debt will be deleted after three years through personal bankruptcy. A transitional regulation applies to insolvencies filed between December 17, 2019 and September 30, 2020.
Protection from creditors: If private insolvency proceedings are opened, one benefits from the so-called “seizure and enforcement protection” (cf. §§ 88, 89 InsO). From then on, creditors may no longer even contact debtors.
How to start debt relief: The first step on the way to the discharge of residual debt is debt counseling. Our specialist law firm for insolvency law accompanies debt relief nationwide and prepares a personal bankruptcy within 4-6 weeks.
Overview of personal bankruptcy:
The course is set!
Preparing your debt relief begins with an assessment of the debt situation. As a specialized law firm with the title of ” specialist lawyer for insolvency law “, we advise you free of charge in the initial consultation. If desired, we will then accompany your debt relief as a strong partner at your side.
This preparation takes about 6 weeks. After submitting your application for insolvency, it will take an average of about a month for the private insolvency proceedings to be opened by the court.
Your debt relief begins!
As soon as the personal bankruptcy has opened, your creditors are no longer allowed to take action against you. The insolvency proceedings then take a total of three years. The garnishment table determines the amount of any monthly amount to be paid. Even easier: simply calculate the amount using our attachment calculator.
You are debt free!
After the three years have elapsed, the remaining debt is released (see Section 301 InsO). This means that the bankruptcy process is over and at that point your debts will be cleared. In principle, only debts from “unlawful acts” (such as from criminal offenses, administrative offenses, etc.) are not included. No matter whether at a bank, at the tax office, at the dentist or at your neighbors: All debts will be deleted after three years by the discharge of residual debts.
Requirements for personal bankruptcy
Debt relief through personal bankruptcy can be carried out under the following conditions:
- You are insolvent – There are debts that can no longer be paid.
- No self-employed activity – otherwise the so-called regular bankruptcy is the correct type of procedure.
- Fewer than 20 creditors exist from previous self-employment (see Section 304 (2) Ins).
- The center of your life is in the USA – at the time of the opening of private insolvency proceedings, your place of residence should be in Germany (Section 2 InsO). After the opening and the first appointment with the insolvency administrator, however, you can move abroad if you wish.
Note: Income is not a prerequisite for personal bankruptcy
If you receive unemployment benefit I or II, you can of course also apply for personal bankruptcy. The same applies to a pension. Income from work is not a requirement for personal bankruptcy. A significant number of our clients are receiving unemployment benefits or are retired. The consumer insolvency procedure is opened even with a low income – we submit a so-called deferral application. The state will then advance the costs of the proceedings and waive them three years after the end of personal bankruptcy if your income situation does not improve.
Special case: own application after the creditor application
Particularly quick action is required if a creditor files for insolvency (so-called creditor application). In this case, we will prepare an application for personal bankruptcy within a short period of time within the so-called “self-application period” (so-called self-application). This is very important because in the worst case scenario, there is a risk of personal bankruptcy without discharge of residual debt. If you have received a claim from a creditor, you should seek professional support as soon as possible. Even if there are only a few days of the deadline for the self-application, we will still help you because of the urgency by giving your case priority.
Facts and figures on personal bankruptcy:
- Since the introduction of personal bankruptcy in 1999, over 1.9 million private individuals used the personal bankruptcy procedure to get rid of their debts by the end of 2019.
- In 2019 there were 86,838 personal bankruptcies.
- The number of over-indebted households is estimated at between 6 and 8 million.
- In 2017, around 28% of people were triggered by critical life events (divorce, death of their partner, illness or accident); For around 21% of those surveyed, the main reason was suddenly unemployed or failed self-employment, with a further 21% the insolvency was due to inefficient housekeeping. Single mothers in particular, as well as fathers who are obliged to provide support, are particularly often over-indebted.
- Personal bankruptcy is the most common method to close a critical debt situation.
Process and duration of personal bankruptcy:
In the following we have put together all the information about the process and duration of personal bankruptcy for you. The implementation of a personal bankruptcy essentially consists of three stages:
- Bankruptcy proceedings
- Debt discharge