Anyone who is toying with the idea of wanting to file for bankruptcy is initially in an awkward position. The causes of debt vary widely. They range from job loss and loss of earnings due to illness to excessive shopping pleasure. It is a very unpleasant business when you notice that financially you cannot go any further. The debts are too high, they can no longer be paid.
But just as there is a solution to almost every problem in life, so is it for debts that have accumulated once. If the outstanding amounts can no longer be paid, the legislature provides a last resort out of this situation: bankruptcy.
Register for bankruptcy: when the mountain of debt can no longer be reduced
However, you don't file for bankruptcy every day and inevitably don't necessarily know what to look out for. Often it is not even clear what to expect.
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Many do not take this step for various reasons. Most of them out of shame that they can no longer do it on their own and some because they fear being dismissed by their employer. However, bankruptcy is not a reason for dismissal and it affects many more people than is generally believed.
That's why we want to list 7 things that you should consider when filing for bankruptcy.
1. Do not file for bankruptcy alone
There are offices at the competent local courts that offer advice on debt issues. There are also lawyers or debt counselors who specialize in bankruptcy and who provide valuable support when filing for bankruptcy. However, the legal requirements are not always so understandable for laypeople and you should therefore never dare to take such a step alone.
First, in the consumer insolvency proceedings, an attempt is made to reach an out-of-court settlement with the creditors. That is, the latter waives the total amount if you can agree with him on the payment of a smaller part amount. In such cases you can save yourself bankruptcy.
2. Note the period of the insolvency period
If you want to file for bankruptcy, you have to be aware that this will not be done within a few months. The insolvency period in Germany is usually between three and six years. During this time, for example, you will be looked after by a state-approved debt counselor.
If you have any questions, you can always contact your debt counselor.
3. Get an overview of the debt
If you are thinking of filing for bankruptcy, you have to get a precise overview of all debts. If this has become difficult due to a lack of invoices, reminders and letters, every creditor, i.e. companies that are owed money, will be happy to send a statement. In this way, the total debts are listed with all possible ancillary charges and you can see everything at a glance.
4. Assets are listed
In the event of bankruptcy, the entire assets are listed. Assets also include condominiums or houses and works of art and everything else that is not directly relevant to one's lifestyle, especially the car in bankruptcy. Consideration is given to what can possibly be sold in order to use the proceeds to reduce debt. The remainder of the debt reduction is carried out by attaching the attachable part of the income.
5. Register for bankruptcy: The garnishment table is valid nationwide
There is a valid garnishment table nationwide, which provides a garnishment exemption limit. This means that a certain net income is specified that may not be attached. If there are maintenance obligations towards children or the spouse, then this exemption limit will be raised. Of course, you also have to be able to prove that you make these maintenance payments on a regular basis. Only the earnings above this exemption limit will be seized.
6. Purchases during the insolvency period are not permitted
If you want to go on vacation during the bankruptcy period or intend to make a major purchase, you can do so from the non-attachable part of your income. However, it should be noted that everyone who files for bankruptcy is recorded in a central database. Various companies, banks, mail order companies, etc. have access to these databases. If someone is recorded in this database, they are usually not granted any installment payments and no loan is granted. The entry in this database is not deleted immediately even after the bankruptcy has been closed.
7. Debt discharge after bankruptcy
Filing for bankruptcy is not an easy step. Many shy away from taking this step, although it would be a great relief for some. Most of them fell into the debt trap through no fault of their own. Often just a short period of unemployment is enough and you can no longer get out of this situation on your own. In such a situation in particular, you shouldn't be ashamed to admit that you need help. You should always keep in mind that after a completed insolvency procedure you will be released from the remaining debt and look forward to a new start in financial terms. The quality of life after bankruptcy will definitely improve.
Common FAQs
When do I file for bankruptcy?
Just as there is a solution to almost every problem in life, so does accumulated debt. If outstanding amounts can no longer be paid on their own, the legislature provides for a last resort out of this situation: bankruptcy.
Where can I find support with filing for bankruptcy?
There are offices at the competent local courts that offer advice on debt issues. Bankruptcy attorneys and debt counselors who specialize in insolvencies/bankruptcies also provide valuable support when filing for bankruptcy.
How do I prepare if I want to file for bankruptcy?
If you want to file for bankruptcy, you have to get a precise overview of your assets and all debts. If documents are missing, you can obtain lists and overviews from your creditors.
What is the advantage of filing for bankruptcy?
You should always keep in mind that after a completed insolvency procedure you will be released from the remaining debt and look forward to a new start in financial terms. The quality of life after bankruptcy will definitely improve.
