Insolvency (Latin insolvens of solvere pay '), refers to the situation of a debtor being unable to meet its payment obligations to the creditor. The bankruptcy is characterized by acute insolvency, the threat of insolvency (lack of liquidity) or indebtedness.
In Austria and Switzerland it is called bankruptcy (from Latin concursus confluence '), with which the meeting of creditors is meant for the judicial division of property of a debtor. Also in Germany the term bankruptcy was used until the introduction of the Insolvency Act. Based on the Italian term banca rotta ( battered table ) is occasionally used the word bankruptcy, with Germany in the bankruptcy legal terms is a criminal offense. In addition comes in the vernacular before the word bankruptcy, which, like bankruptcy occupied strongly negative.
The nature and implementation of insolvency is regulated differently in different states. Excluded from the insolvency law insolvency incompetent debtor.
After a checkered history of bankruptcy and insolvency law in Germany has been around since the introduction of the Insolvency Act 1999 mainly two methods:
- Regular insolvency
- Bankrupts ( personal bankruptcy )
Prerequisite for the rule of insolvency are:
- More than 19 creditors
- Existing claims from employment (wages, salaries, social security contributions )
If these conditions are not met, the case of natural persons, the bankrupts procedure is performed, if no agreement has been made with the creditors. For the unification attempt a period of six months is provided. This method allows a discharge of residual debt after six years.
The data on the insolvency based on the information of the bankruptcy courts. 2011 saw in Germany according to the Federal Statistical Office, a total of about 159 148 insolvencies. The greater part of it was attributable to personal bankruptcies ( 129 049 ), which is in the majority of these were personal bankruptcies ( 101 069 ). The number of corporate bankruptcies totaled 30,099.
Of the 24,208 corporate insolvencies in the period January to October 2012, particularly following six sectors of the economy were affected:
In England there is a legally regulated procedure, similar to the German consumer insolvency proceedings ( bankruptcy ).
- The insolvency must be requested in court by the debtor or by a creditor. The applicant has to bear the costs (about £ 700, as of October 2012).
- After you have ordered immediately is creditor protection.
- The remaining debts usually takes place within twelve months.
- During the duration of the procedure a number of limitations. Among other things, the debtor in the issuance of new debt must declare that it is in bankruptcy, and certain activities (such as management of a capital company and work as a lawyer ) are prohibited.
In Austria, one no longer distinguishes between compensation and bankruptcy, but it is since 2010 the new Austrian insolvency law.
In the United States draw a distinction between voluntary and involuntary processes. After an extensive law reform in 2005, there is also a method that is similar to the German consumer insolvency proceedings.
Is also made between a liquidation ( under Chapter 7, wherein the entire possession of the person sells or the creditor is passed and explains in the case of a natural person, not abbezahlte debt null and void, "discharged " are ) and the reorganization ( in the debtor seeks to pay off ) within 5 years under protection of the court all debts. Liquidation is the process which is referred to by many Americans colloquially as bankruptcy, mainly because this is against the reorganization preferred because of its simplicity and because the person has to be really bankrupt (see test below).
For natural persons can by the U.S. Trustee under Chapter 7 is a " means test " be performed when the liabilities are higher than the average annual income for a household of the same size in the State in which the person resides. This test lasts for six months. Without this test, the process is usually complete in 4 to 6 months. You only have to court a proceeding pursuant to section 341 appear "first -meeting- of- creditors "; but there often occur no creditors, and you will be questioned only by the U.S. Trustee under oath.
A Bankruptcy can be due to various factors, being generally differentiates between internal and external causes of insolvency.
Internal causes include doing all the activities that take place directly by the company concerned or the person himself and eventually lead to insolvency. This may be for example, bad planning or misjudgments.
External causes of insolvency, however, describe all the factors that influence from the outside. Examples of external causes are structural and cyclical changes of the market, competitive situations (job market, sales), but often unforeseen events.
For natural persons, can not be easily differentiated between external and internal causes. Common causes for natural persons are divorce, illness, loss of a job.
To avert bankruptcy, there are the following options:
For personal bankruptcy, there are debt counselors that can help to achieve cost savings through restrictions in the private life.
As part of a debt settlement plan, the income, for example, in corporate bankruptcy proceedings in advertising or specializations can be increased. In personal bankruptcy the divestment measures of valuables and unneeded consumer goods must be checked.
Only then, as appropriate, on an insolvency proceeding ( under bankruptcy laws ), which opens either in a legal proceeding or in an out of court settlement. The prerequisite is that the bankruptcy estate for the creditors still sufficient for the fees and expenses of the insolvency administrator and at least partially to satisfy the debt.
For legal persons and self -employed, the corresponding provisions of the Commercial Code, to consider that claim in more detail, when a bankruptcy occurs time - as opposed to " perceived" failure of a private person. In particular, the satisfaction of a single creditor, less favorable treatment of other creditors is problematic as a resource from contesting facts arise. The belated filing a bankruptcy may possibly be considered a criminal offense and can lead to an action for Insolvenzverschleppung.
- Bankruptcy is a not more common since 1999, term for an unwrapped after the bankruptcy order process.
- Comparison is a 1999 abgeschafftes concept with which an insolvent company is to be renovated, for otherwise a bankruptcy would be opened; the comparison is worked out in the Insolvency Act.
- Connection bankruptcy is a bankruptcy that follows a failed comparison, is thus applied afterwards.
- Insolvency plan is the plan ( the company or the trustee in bankruptcy / restructuring manager ), which should lead to a successful renovation.
- Bankruptcy is not more common since 1999, term for an unwrapped after the bankruptcy order process. The bankruptcy was only in the new federal states, covering both bankruptcy and comparer.
- Insolvency plan is a bankruptcy petition with simultaneous presentation of an insolvency plan (also pre-packaged ) (§ 217 et seq Insolvency Act ).
- Bankruptcy is a territorial insolvency proceedings over the assets of a domestic company, which has its center of economic activity abroad and has gone there in the bankruptcy.
- Supplier insolvency: Opened a supplier of a company's insolvency, this may have far-reaching consequences, and in the worst case to further bankruptcies.
- Discount insolvency proceedings: If the estate liabilities exceed assets of an estate, the heirs can achieve a separation of the estate from the so-called self- wealth, so that they no longer liable with their total assets ( discount plus equity capital) by the opening of the probate proceedings.