Everyone deserves a second chance
Things can go wrong financially. Then negotiations with creditors are due, or insolvency proceedings that make a fresh start possible. The law offers clarity and new chances in difficulty; it should also be used to begin again, towards a self-determined and self-reliant life.
That is not a phrase but the third of my convictions. Someone in payment difficulty generally does not have a character defect but a problem — and problems can be worked on.
First: establish the position
The most common mistake is not the wrong decision but the postponed one. Illiquidity and over-indebtedness are legal concepts with clear criteria, not states of mind. They can be examined — with a liquidity plan and a going-concern forecast.
Everything else depends on that examination. If the position is strained but not insolvency-ripe, every restructuring route remains open. If it has occurred, filing deadlines and personal liability risks are running. For the managing director of a GmbH that is no academic question: payments made after insolvency-ripeness must be reimbursed, and the duty to file is backed by criminal law.
Restructuring outside formal proceedings
As long as insolvency-ripeness has not occurred, the out-of-court route is almost always the better one: quieter, faster and cheaper.
It includes deferral and instalment agreements, partial waivers against a recovery clause, refinancing of liabilities, negotiations with banks about security, and discussions with the tax office and social insurance carriers. The decisive point: creditors agree to a settlement only if they believe they will do better with it than without. That has to be demonstrated to them.
Here my experience from more than two decades as a business consultant and managing director comes into play — and my training as a mediator. Negotiating with several creditors at once is a balancing of interests, not the enforcement of a right.
Within the proceedings
If a petition is unavoidable, everything turns on preparing it properly. German insolvency law is expressly also a restructuring law: an insolvency plan, self-administration and protective shield proceedings allow a business to continue during proceedings and to be relieved of debt. Those routes are open only to those who come in time and present a viable concept.
For natural persons — self-employed and consumers alike — the proceedings lead to discharge of residual debt. Three years after opening, the way is clear for a fresh start.
Also for creditors
The other side has the same questions with the signs reversed: filing claims, realising security, asserting rights of segregation and separate satisfaction, defending against an administrator’s avoidance claims. I represent you in those situations too.
How we begin
Call before the deadline runs. For a first conversation the rough figures are enough: outstanding liabilities, running costs, available funds, the most pressing creditors. From that it follows whether we negotiate or whether something else is due.