About Us
FAQ
Global Law Experts Logo
Global Law Experts Logo

Find a Global Law Expert

Specialism
Country
Practice Area

Awards

Since 2010, the Global Law Experts annual awards have been celebrating excellence, innovation and performance across the legal communities from around the world.

German Reform of Insolvency Law Enters Into Force: Shortened Discharge of Residual Debt and Introduction of New Reorganization Options, Especially for Corona "Victims"

posted 3 years ago

At the turn of the year, two important laws reforming insolvency law in Germany came into force. The Act on the Further Shortening of Residual Debt Relief Proceedings came into force with retroactive effect (!) from 01.10.2020, while the Act on the Further Development of Restructuring and Insolvency Law came into force on 01.01.2021.

The Act on the Further Shortening of the Residual Debt Relief Procedure will enable over-indebted entrepreneurs and consumers to make a fresh start more quickly. The reduction of the residual debt discharge procedure to three years instead of the current six years ensures that those affected can participate actively in social and economic life again more quickly. The reduction of the residual debt discharge procedure to three years applies retroactively to all insolvency proceedings filed after October 1, 2020. This will also enable those debtors who have fallen into insolvency as a result of the Covid 19 pandemic to be supported in making a fresh economic start. For insolvency proceedings filed in the period from 17.12.2019 to 30.08.2020, inclusive, the current six-year procedure will be shortened on a month-by-month basis.

The Act on the Further Development of Restructuring and Insolvency Law introduces a legal framework for restructuring that can be used to avert insolvency. It ensures that the waiver of the appointment of an insolvency administrator in the so-called self-administration proceedings is reserved in principle only for well and solidly prepared projects. At the same time, companies are provided with a legally secure path to the self-administration-based restructuring options. However, as it will not always be possible to ensure compliance with these requirements under the current crisis conditions, these new special requirements are not intended to apply to companies whose insolvency is attributable to the Corona pandemic. Consequently, the new rules on reorganization through restructuring under German insolvency law can be used in particular by companies that have run into financial difficulties as a result of the Corona pandemic.

Author

Find the right Legal Expert for your business

The premier guide to leading legal professionals throughout the world

Specialism
Country
Practice Area
0
LAWYERS RECOGNIZED
0 m+
EVALUATIONS OF LAWYERS BY THEIR PEERS
0
PRACTICE AREAS
0
COUNTRIES AROUND THE WORLD

Join

0
who are already getting the benefits

Sign up for the latest legal briefings and news within Global Law Experts’ community, as well as a whole host of features, editorial and conference updates direct to your email inbox.

Naturally you can unsubscribe at any time.

Newsletter Sign Up

About Us

Global Law Experts is dedicated to providing exceptional legal services to clients around the world. With a vast network of highly skilled and experienced lawyers, we are committed to delivering innovative and tailored solutions to meet the diverse needs of our clients in various jurisdictions.

Contact Us

Stay Informed

Join Mailing List

GLE