Who is an insolvency administrator?

An insolvency administrator is, in most cases, an experienced attorney with a special qualification in insolvency law. Certified public accountants or tax advisors may also take on this role if they possess the necessary expertise.

The court selects the insolvency administrator from a pool of qualified individuals. What matters most is that the administrator is independent and neutral. This means they must have no personal or financial ties to the debtor or any individual creditor. Only then can the proceedings be conducted fairly and objectively.

In Germany, there is no formal education program for becoming an insolvency administrator. Most professionals working in this field have built a reputation through many years of experience, legal knowledge, and trustworthiness.

What are the duties of an insolvency administrator?

The responsibilities of an insolvency administrator are wide-ranging. Once the insolvency proceedings are opened, they take charge of the debtor’s financial affairs. In other words, they gain control over the debtor’s assets and make important decisions—always in the best interest of the creditors.

Their responsibilities include, among other things:

Securing and managing the insolvency estate: The administrator reviews the available assets and ensures that no value is lost.
Reviewing creditor claims: All creditors file their claims. The administrator checks whether these claims are valid.
Managing business operations (in the case of companies): In certain situations, the administrator continues running the company temporarily to maintain operations or achieve better outcomes for creditors.
Liquidating assets: They sell off property—such as machinery, real estate, or vehicles—and add the proceeds to the insolvency estate.
Distributing funds to creditors: Once sufficient funds are available, the administrator creates a distribution plan and pays out the respective shares.
Reporting obligations: Throughout the process, the administrator regularly reports to the insolvency court and the creditors' assembly.

In short, the insolvency administrator acts as a manager, mediator, and executor—holding a great deal of responsibility.

How is an insolvency administrator appointed?

The appointment is made by the relevant insolvency court. As soon as an insolvency application is filed and the court decides to open proceedings, an administrator is named. The court decides who is suitable based on specific criteria.

In many cases, the court already appoints a preliminary insolvency administrator beforehand (i.e. before the official opening of proceedings). This person safeguards the assets, reviews initial documents, and prepares the process.

The affected individual or company may make suggestions, but they have no right to have these considered. The court primarily looks for independence, experience, and professional expertise. There is no official license required to become an insolvency administrator, but courts usually rely on a list of trusted professionals.

When does an insolvency administrator become active?

An insolvency administrator typically becomes active once the insolvency court officially opens the proceedings. From that point on, they are authorized to take control of the debtor’s assets and assume management responsibilities.

However, in many cases, the role begins earlier with the appointment of a preliminary insolvency administrator. This occurs as soon as an insolvency application is filed and the court wants to ensure that assets are protected until a decision is made. Even then, the administrator may already take certain actions, such as monitoring bank accounts or gathering important information.

Comprehensive duties begin only once the proceedings are opened. At that stage, the insolvency administrator takes full control of the assets and conducts the proceedings on behalf of the court.

Where does an insolvency administrator work?

An insolvency administrator works wherever the insolvency proceedings take place. This means primarily at the location of the responsible insolvency court, but often also at the registered office of the affected company or the place of residence of the individual debtor.

They are not based in an office at the court. Instead, they typically work from a specialized law firm or accounting firm.

On site, they review documents, speak with debtors and creditors, and gather a full picture of the financial situation. They also plan potential asset liquidations.

Depending on the size of the case, the administrator’s work may be limited to a local area or spread across multiple locations—particularly in the case of companies with several branches.

What types of insolvency administrators are there?

German insolvency law recognizes several roles that are generally referred to as insolvency administrators in practice. These roles differ depending on the type of proceedings and the timing of appointment:

Preliminary insolvency administrator: Appointed by the court before the proceedings are officially opened. Their role is to safeguard assets and ensure the process is properly prepared.
Insolvency administrator in standard proceedings: Takes over full control of the assets once the proceedings begin, manages business operations, and handles the case through to completion.
Consumer insolvency administrator: Responsible for private individuals, typically within a simplified process. They verify claims and organize a fair distribution.
Custodian (Sachwalter): Appointed in special proceedings (e.g. protective shield proceedings or self-administration). The company retains operational control, but the custodian supervises the process.

The exact role depends on the type of insolvency and the structure of the proceedings.

How long does an insolvency administrator remain in office?

An insolvency administrator remains in office for as long as necessary to carry out the proceedings. There is no set duration. For simple consumer insolvencies, the process may last only a few months. In complex corporate cases, it may take several years.

The role ends once the insolvency proceedings are completed. This is determined by the court when all issues have been resolved, the assets have been liquidated, and the creditors have received payment. The administrator then submits a final report and is officially discharged.

In some exceptional cases, the administrator may continue working after the proceedings have formally ended—such as when follow-up issues or unresolved disputes arise. However, this is the exception rather than the rule.

Insolvency administrator