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An insolvency ( Latin insolventia , to solvere ' to pay' ) describes the situation of a debtor not being able to meet his payment obligations to the creditor . Insolvency is characterized by acute insolvency (“illiquidity” or insufficient liquidity ) or impending insolvency that can be derived from over-indebtedness . Insolvency can be factually determined, whereas over-indebtedness is not always clear as a result of economic assessments (possibly in compliance with accounting regulations).

The type and implementation of bankruptcy is regulated differently in the individual countries. The aim of insolvency proceedings also differs from legal system to legal system; While the primary goal in Germany, Switzerland and Austria is to satisfy or distribute the losses fairly among the creditors, the goal in France is to maintain jobs and in the USA to enable the debtor to have a fresh start . Debtors who are incapable of bankruptcy are excluded from bankruptcy law .

Explanation of terms

In Austria and Switzerland one speaks of bankruptcy (from lat. Concursus 'run together'), which means the gathering of creditors for the judicial division of the assets of a debtor. In Germany, too, the term bankruptcy was used until the insolvency code was introduced. Based on the Italian term banca rotta (smashed table), the word bankrupt is occasionally used, whereby in Germany bankruptcy is a criminal offense from a legal point of view . In addition, the word bankrupt occurs in everyday language , which has a strong negative connotation.

Derived terms

  • Connection bankruptcy is a bankruptcy following a failed comparison, is thus applied to it afterwards.
  • Collective enforcement is a term that has not been used since 1999 for a procedure carried out according to the collective enforcement order. The total enforcement was only valid in the new federal states and equally covered bankruptcy and settlement.
  • Insolvency plan is the plan (of the company or the trustee / restructuring administrator) that is intended to lead to a successful restructuring.
  • Bankruptcy is a term that has not been used in Germany since 1999 for a procedure carried out according to the bankruptcy code.
  • Criminal insolvency: Designation of an insolvency triggered by criminal activities (well-known example: FlowTex ).
  • Supplier insolvency : If a supplier files for a company bankruptcy, this can have far-reaching consequences and in the worst case lead to further bankruptcies.
  • Mass inadequacy : If the insolvency administrator determines after the opening of insolvency proceedings that the bankruptcy estate is not sufficient to meet the mass liabilities (so-called insolvency in bankruptcy), he will notify the bankruptcy court of mass inadequacy .
  • Estate insolvency proceedings : Are the estate liabilities higher than the estate included assets , the heirs can through the opening of the estate bankruptcy achieve a separation of the estate from the so-called own assets, so they are not that more of its total assets (discount plus own assets) stick.
  • Planned insolvency is an application for insolvency with simultaneous submission of an insolvency plan (also pre-packaged ; § 217 ff. InsO).
  • Territorial insolvency is insolvency proceedings against the domestic assets of a company that has its economic focus abroad and has gone bankrupt there.
  • Comparison is a concept that was abolished in 1999 and is intended to reorganize an insolvent company that would otherwise have to open for bankruptcy. The comparison has worked out in the bankruptcy code; the insolvency plan has taken its place .


A bankruptcy can be attributed to various factors, whereby a general distinction is made between internal and external causes of bankruptcy.

Internal causes include all activities that originate directly from the company or the person themselves and ultimately lead to bankruptcy. This can be, for example, incorrect planning or incorrect assessments.

External causes of insolvency, on the other hand, describe all external factors. Examples of external causes are structural and economic changes in the market, competitive situations (labor market, sales), but often also unforeseen events.

In the case of natural persons, it is often impossible to differentiate between external and internal causes. Common causes in natural persons are divorce, illness, and job loss.

Avoidance options

To avert bankruptcy, there are the following options :

  1. Negotiation with the debtor's creditor (s) as to whether a debt relief (in full or in part), an installment payment or a deferral (postponement to a specific or indefinite point in time) is granted,
  2. the guarantee of a solvent (i.e. solvent) third party, such as a relative or a credit institution .

For private bankruptcy there are debt advisors who can help to achieve cost savings through restrictions in private life.

As part of a debt settlement plan, income can be increased, for example in the event of corporate bankruptcy, through advertising or specializations . In the event of personal bankruptcy, the sale of valuables and consumer goods that are not required must be checked.

Only then may insolvency proceedings (according to insolvency law) follow, which will either result in judicial proceedings or an out-of-court settlement . The prerequisite is that the bankruptcy estate is still sufficient for the fees and expenses of the insolvency administrator and at least partially to satisfy the debts of all creditors .

For legal entities and the self-employed, the corresponding regulations in the Commercial Code must be taken into account, which specify more precisely when an insolvency date occurs - in contrast to the "perceived" insolvency of a private person. In particular, the satisfaction of a single creditor while putting other creditors in a worse position is problematic, as this gives rise to contestation. The late filing of bankruptcy can possibly be regarded as a criminal offense and lead to proceedings for the delay in bankruptcy .

COVID-19 pandemic: suspension of the obligation to file for bankruptcy

The Federal Ministry of Justice and Consumer Protection published a law to mitigate the consequences of the COVID-19 pandemic. The law provides for the following five measures in the area of ​​insolvency law:

  1. The liability-reinforced and in some cases also punishable three-week obligation to file for insolvency is temporarily suspended until September 30, 2020. This only applies to cases in which the insolvency or over-indebtedness is due to the consequences of the COVID-19 pandemic. In addition, it should be necessary that there are prospects of eliminating the insolvency. Companies that are required to apply should be given the opportunity to avert insolvency proceedings by taking state aid, but also, if necessary, in the course of restructuring or financing agreements.
  2. During the suspension of the obligations to file for insolvency, the managing directors are only liable to a limited extent for payments that they make after the company is ready for insolvency.
  3. New loans granted to companies affected by the COVID19 pandemic during the suspension of the obligation to file for insolvency are not to be regarded as an immoral contribution to the delay in bankruptcy.
  4. Performing services to contractual partners during the suspension can only be challenged to a limited extent.
  5. The ability of creditors to force insolvency proceedings by filing for insolvency is restricted for three months.

These measures are intended to give companies affected by the effects of the COVID-19 pandemic time for restructuring efforts and negotiations with their creditors. The regulations thus take effect alongside the comprehensive state aid programs. (As of March 30, 2020)

Legal situation by country



In Austria one no longer differentiates between compensation and bankruptcy, but the new Austrian insolvency law has been in effect since 2010.


The Liechtenstein bankruptcy code was introduced in 1973 based on the Austrian model at the time. It has remained in effect almost unchanged since then, while in Austria bankruptcy and insolvency law has been subjected to numerous amendments. Liechtenstein insolvency and bankruptcy law is regulated by the law on the introduction of the law on bankruptcy proceedings (EGKO), the bankruptcy order (KO) and the law on the debt restructuring agreement.


United Kingdom

In the United Kingdom there is a legally regulated process similar to the German consumer bankruptcy process ( bankruptcy ).

  • The bankruptcy must be filed in court, by the debtor or by a creditor. The applicant has to bear the costs (£ 705, as of October 2014).
  • After filing the application, there is immediate protection from creditors.
  • The remaining debt is usually discharged within twelve months.
  • The discharge of residual debt is normally recognized throughout the EU, with the exception of Denmark.
  • A number of restrictions apply during the duration of the procedure. Among other things, when taking on new debts, the debtor must declare that he is in bankruptcy, and certain activities (such as running a corporation and working as a lawyer) must be expressly permitted by the competent bankruptcy court.

United States

The US bankruptcy law is federally regulated in the US bankruptcy code, BC .

A distinction is made between voluntary and involuntary procedures. After an extensive legal reform in 2005, there is also a procedure here that is similar to the German consumer insolvency procedure.

In addition, a distinction is made between liquidation according to Chapter 7 BC and reorganization according to Chapter 11 BC. Upon liquidation, the entire property of the debtor is sold or handed over to the creditor. In the case of a natural person, debts that have not been paid off are declared null and void ("discharged"). In the case of reorganization, however, the debtor tries to pay off all debts within 5 years under the protection of the court and to maintain his company. The procedure according to Chapter 7 ( to file under Chapter 7 ) is colloquially referred to by many Americans as bankruptcy , because the debtor really has to be insolvent (see examination below). It is preferred over reorganization ( to file under Chapter 11 ) because of its simplicity.

A “means test” under Chapter 7 can be carried out by the insolvency administrator ( trustee ) for natural persons if the debts are higher than the average annual income for a household of the same size in the state in which the person lives. This exam lasts six months. Without this examination, the procedure is usually completed within 4 to 6 months. You only have to appear once in court for proceedings under Section 341 “first-meeting-of-creditors”; Often there are no believers there and one is only questioned under oath by the trustee.

Statistics (Germany)

The data on bankruptcy are based on the information provided by the bankruptcy courts. According to the Federal Statistical Office, there were a total of 141,332 bankruptcies in Germany in 2013 . The greater part of this was accounted for by personal bankruptcies (115,337), the majority of which were consumer bankruptcies (91,200). The number of corporate bankruptcies, including small businesses, was 25,995. In 2018, the number of corporate bankruptcies reached 19,900, the lowest level since 1994, when there had been 18,820 cases. There was also a decline in consumer bankruptcies: there were 68,600 cases in 2018, the lowest figure since 2005.

year Total bankruptcy
including corporate
including consumer
1999 034,038 026,476 001,634
2000 042,259 028,235 006,886
2001 049,326 032,278 009,070
2002 084,428 037,579 019,857
2003 100,723 039,320 032,131
2004 118.274 039.213 047,230
2005 136,554 036,843 066,945
2006 161,430 034,137 094,389
2007 164,597 029,160 103.085
2008 155.202 029,291 095,730
2009 162.907 032,687 098,776
2010 168,485 031,998 106,290
2011 159,418 030,099 103.289
2012 150.298 028,297 097,608
2013 141,332 025,995 091,200
2014 134,871 024,085 086,298
2015 127,438 023.101 080.146
2016 122,514 021,518 077,238
2017 020,140 071,960
2018 019,900 068,600

Of the 24,208 corporate insolvencies in the period from January to October 2012, the following six economic sectors were particularly affected:

proportion of Economic sector Affected
claims in EUR
3,091 12.8% Preparatory construction site work, construction installations and other expansion 10,062 0.688,681,000
2,364 09.8% gastronomy 05,807 0.346,892,000
2,325 09.6% Retail trade (excluding motor vehicle trade) 38,802 1,666,457,000
1,453 06.0% Wholesale 07.139 2,102,881,000
1,375 05.7% Business administration and management, business consultancy 01,829 4,956,893,000
1,117 04.6% Other expansion (finishing trades, ancillary construction trades) 02,821 0.214,637,000

See also


  • Reinhard Goerdeler (ed.): Labor law and insolvency. Bonn symposium of the ZGR (= magazine for corporate and corporate law . ZGR special issue 13.2). De Gruyter, Berlin / New York 1984, ISBN 3-11-138438-1 .
  • Reinhard Goerdeler (ed.): The company in bankruptcy. To the first report of the Insolvency Law Commission. 5th symposium of the ZGR (= magazine for company and corporate law . ZGR special issue 15.2). De Gruyter, Berlin / New York 1986, ISBN 3-11-138440-3 .
  • Bob Wessels: Insolvency law. Editor Jan M. Smits, Elgar Encyclopedia of Comparative Law , Edited by Edward Elgar, Cheltenham / Northampton, MA 2006

Web links

Wiktionary: Insolvency  - explanations of meanings, word origins, synonyms, translations

Individual evidence

  1. Christoph G. Paulus : "§ 1 InsO and its insolvency model". In: NZI 2015, pp. 1001–1005.
  2. Jürgen Grosche: On the trail of the black sheep . Advertisement on , April 5, 2016, accessed on September 5, 2016.
  3. Thomas Hutzschenreuter: General Business Administration. 3. Edition. Gabler, Wiesbaden 2009, ISBN 978-3-8349-1593-1 , p. 80.
  4. The Federal Court of Justice - Library: Research into legal materials - Law to mitigate the consequences of the COVID-19 pandemic in civil, insolvency and criminal procedure law. Retrieved July 27, 2020 .
  5. ↑ The obligation to file for insolvency is suspended. Retrieved on July 27, 2020 (German).
  6. Christian Friedrich Zangerle: Insolvency and bankruptcy law (representation and advice in proceedings), accessed on February 15, 2019
  7. Law of July 17, 1973 concerning the introduction of the law on bankruptcy proceedings (bankruptcy code). On: Liechtenstein Collection of Laws (Lilex)
  8. Law of July 17, 1973 on bankruptcy proceedings (Bankruptcy Code; KO). On: Lilex
  9. Law of April 15, 1936 on the debt restructuring agreement . On: Lilex
  10. Factsheet Bankruptcy . Website of National Debtline , accessed on 5 November 2012 found.
  11. ^ Liquidation Title 11 of the United States Code, Ch. 7
  12. ^ Reorganization Title 11 of the United States Code, Ch. 11-13
  13. ^ Reorganization Title 11 of the United States Code, Ch. 7, Sec. 341
  15. Overview page on insolvencies ( , accessed on July 13, 2014)
  16. Insolvencies by years (, accessed on July 13, 2014)
  17. Statistics on corporate insolvencies (, accessed on July 17, 2016)
  18. a b c