What is standard insolvency?

Standard insolvency is a legal process designed for businesses or former self-employed individuals who are unable to pay their debts. It is governed by law and helps to organize outstanding claims. The goal is to liquidate existing assets and distribute the money to creditors.

The process begins with an application to the insolvency court. If the court approves the application, standard insolvency proceedings are opened, and an insolvency administrator is appointed. This person takes control of the assets. In most cases, the debts are settled as far as possible, and the company is dissolved.

What is the difference between standard insolvency and consumer insolvency?

Standard insolvency is intended for businesses or self-employed individuals with multiple creditors. Consumer insolvency, by contrast, applies to private individuals. It is simpler and shorter.

Standard insolvency involves stricter procedures. The debtor must provide more documentation and work closely with the insolvency administrator. Creditors, including collection agencies, are more involved. The process is also more complex, as it often includes larger amounts of debt and more parties.

Who can apply for standard insolvency?

Standard insolvency applies to legal entities such as limited liability companies (GmbHs), public limited companies (AGs), or associations. It is also available to self-employed individuals who have ceased their business activity but still have significant debts or many creditors.

Private individuals without business-related debt typically fall under consumer insolvency.

What requirements must be met?

To initiate standard insolvency proceedings, certain legal conditions must be met:

Inability to pay: Bills and financial obligations can no longer be met.
Or overindebtedness: Debts exceed the value of available assets.
Complete application: All required forms and supporting documents must be submitted correctly.
Jurisdiction: The application must be filed with the competent insolvency court.

Only if these conditions are fulfilled will the court open the proceedings.

How do standard insolvency proceedings work?

The process begins with the formal insolvency application. The court reviews the documents and decides whether to open proceedings. If approved, the court appoints an insolvency administrator.

The administrator gathers information, secures the assets, and notifies the creditors. Creditors are then invited to submit their claims. A creditors’ meeting follows, where further actions are discussed.

Next, the assets are sold or otherwise liquidated. The proceeds are distributed proportionally to the creditors. When this process is complete, the proceedings are closed. For companies, this generally marks the end of business operations.

What documents are required?

A range of documents and supporting information must be submitted with the application. These typically include:

A list of all creditors (including names, addresses, and claim amounts)
A complete overview of all assets
Contracts, invoices, and financial statements
For the self-employed: profit and loss statements
Information about any ongoing legal disputes or proceedings

If the documentation is incomplete or outdated, the court may reject the application.

What is the role of the insolvency administrator?

The insolvency administrator is a neutral third party appointed by the court. Their responsibilities include securing, managing, and distributing the debtor’s assets.

They also verify whether creditor claims are valid. Creditors, including collection agencies, must submit their claims directly to the administrator. Throughout the process, the administrator acts as the main point of contact and ensures that everything complies with legal requirements.

Where is standard insolvency handled?

Standard insolvency proceedings are managed by the competent insolvency court, a division of the local district court. Jurisdiction is determined by the registered office of the business. For former self-employed individuals, it is the location of their last business activity.

The proceedings are public and published online at insolvenzbekanntmachungen.de, where creditors can access updates.

Who is affected by standard insolvency in the context of debt collection?

Standard insolvency directly affects creditors—that is, individuals or companies still owed money. This includes collection agencies that handle claims on behalf of clients.

Once standard insolvency proceedings are opened, no further reminders or enforcement proceedings are allowed. From this point on, all actions go through the court and the appointed insolvency administrator.

What should creditors consider in collection cases?

After proceedings begin, creditors can no longer pursue debts independently. Collection agencies must also cease their activities. Instead, claims must be submitted in writing to the insolvency administrator.

There are fixed deadlines for filing claims. Creditors who miss these deadlines may be excluded from receiving any payments. Dunning or enforcement proceedings already in progress are automatically suspended when insolvency begins.

Important: Filing a claim with the insolvency administrator replaces the standard collection process.

How can claims be filed during insolvency proceedings?

Claims must be submitted to the insolvency administrator using an official form. The form must include:

The name and address of the creditor
The total amount of the claim
A brief description of the reason for the debt
Supporting documentation such as contracts, invoices, or dunning notices
Any interest or additional fees being claimed

Claims must be submitted within the deadline set by the insolvency court. Only timely submissions will be considered in the distribution of assets.