Insolvency proceedings bankruptcy-proceedings for entreprenneurs (Konkurs) composition-proceedings (Ausgleichsverfahren) bankruptcy-proceedings for consumers - debt settlement proceedings (Schuldenregulierungsverfahren)
Debtor in possession Section 186 (1)In debt settlement proceedings (Schuldenregulierungsverfahren) the debtor remains in possession of the bankrupt’s estate unless the court orders otherwise (debtor in possession). (2)The court shall revoke the right to be debtor in possession and appoint a bankruptcy administrator, should 1.the debtor’s financial situation not be straightforward, especially with regard to the number of creditors and the amount of debts, or 2.circumstances be known which would make it likely, that leaving the debtor in possession would be detrimental to the creditors, or 3.the debtor not have presented an exact disclosure of assets (Vermögensverzeichnis).
composition-proceedings Section 2 The application for the opening of a composition proceeding must contain the following elements A reorganisation plan A declaration that there is no reason that would make the composition proceeding unlawful
composition-proceedings Section 2 Information on how the reorganisation shall be achieved and, in particular, how the funds necessary to pay the quotas offered to the creditors shall be raised An exact inventory A status of assets and liabilities A list of creditors
composition-proceedings Section 3 In particular, for the duration of the proceedings the court may forbid specific legal acts, in general or without the trustee’s consent if the debtor not have presented an exact disclosure of assets (Vermögensverzeichnis) or circumstances be known which would make it likely, that leaving the debtor in possession would be detrimental to the creditors
Debtor in possession Debt settlement proceedings An admistrator isn’t appointed Composition proceedings The debtor is supervised by an administrator
Reform debt settlement proceedings Insolvency proceedings entreprenneurs Liquidation proceedings (if the business is closed) Bankruptcy proceedings (this proceedings start with an investigation period to find out if the business can be rescued or has to be sold) (Konkurs) Reorganisation proceedings (Sanierungsverfahren) Reorganisation proceedings, debtor in possession (Sanierungsverfahren) in place of composition- proceedings (Ausgleichsverfahren)
Reorganisation proceedings Debtor in possession Supervised by an administrator Advantage Encourage the debtor to file for the proceeding Disadvantage When it is advisable to revoke the right to be debtor in possession?