Conduct of consumer insolvency proceedings

If you have (imminent) insolvency and you are not self-employed, you can apply for consumer insolvency proceedings.

Many people have debts. Debts become a serious problem if they cannot be paid off with their own income or assets. This has serious consequences:

Creditors receive little or no money at all. Debtors, on the other hand, are usually deprived of all income or assets that go beyond their subsistence level. They suffer an economic decline, live in modest circumstances and usually have no prospect of better times.

If the financial situation of a household worsens, it is important to approach the creditors at an early stage (possibly with the help of third parties, e.B. a debt counseling center) and to look for solutions together with them, e.B. by agreeing on installment payments. As a result, it can be possible to avert a financial collapse. If this is no longer possible, the consumer insolvency proceedings should help.

In the event of your (imminent) insolvency, these insolvency proceedings serve to exploit your existing (attachment-free) assets and to distribute the proceeds evenly to your creditors.

With the initiation of consumer insolvency proceedings, you have the opportunity to file an application for discharge of residual debt and (if all conditions are met) to be released from the existing liabilities.

The consumer insolvency proceedings apply to all natural persons,

  • who (currently) do not carry out any self-employed economic activity or have (in the past),
  • who have carried out an independent economic activity in the past, but whose financial circumstances are manageable and against whom there are no claims from employment relationships.
    • Your financial circumstances are only considered manageable if you have fewer than 20 creditors at the time when the application for the opening of insolvency proceedings is filed.
    • Receivables from employment relationships are in particular claims of the tax authorities from payroll tax as well as claims from social security institutions for contributions from your former employees.

For all other natural persons, the so-called company insolvency proceedings are the right type of proceedings (read more about this under "Conduct of standard insolvency proceedings against a (former) company").. There, too, there is the possibility of discharge of residual debt.

A prerequisite for the initiation of consumer insolvency proceedings is the existence of the reason for insolvency of the occurred or the imminent insolvency. A situation must have arisen in which you are currently or in the foreseeable future no longer able to meet the payment obligations due on time and in full.

Out-of-court settlement attempt

As an insolvent consumer, you can only apply for the opening of insolvency proceedings against your assets if you have previously made a serious attempt to reach an out-of-court agreement with your creditors on debt settlement. This is a mandatory prerequisite for the judicial proceedings and to be proven when submitting the application.

The attempt at agreement must be based on an orderly plan. It is not enough if you only ask the creditors in general whether they are willing to reach an amicable agreement with you.

You must make a proposal to your creditors on how you want to adequately settle your debts. As a rule, you can set up a payment plan in which you specify fixed installments and exact payment dates that should replace the originally owed payments and the dates applicable to them.

A serious attempt at an agreement also requires that you disclose your income and financial circumstances. Creditors must be able to assess, on the basis of the information, whether the proposed modification of the payment obligations is necessary and whether it corresponds to their financial possibilities.

Application for opening

If the out-of-court settlement fails despite serious efforts, you can apply to the insolvency court for the opening of insolvency proceedings.

Important: Together with the insolvency application, you must submit a certificate from a suitable body about the failure of your out-of-court debt settlement attempt.

Suitable persons who are allowed to issue a certificate of the out-of-court settlement attempt are, among others:

  • members of the legal advisory professions (lawyers or notaries) as well as
  • Whether a position is "suitable" within the meaning of § 305 para. 1 No. 1 InsO, is governed in Lower Saxony by the Lower Saxony Implementation Act to the Insolvency Code (Nds. AGInsO). In Lower Saxony, the Lower Saxony State Office for Social Affairs, Youth and Family, Team 3SL1, Domhof 1, 31134 Hildesheim, was designated as the competent authority for the implementation of the Nds. AGInsO in particular recognition of the suitable positions and settlement of remuneration with them.

Make sure at an early stage (preferably before you carry out an out-of-court debt settlement procedure) whether the organisation to which you have turned has been recognised accordingly by the Düsseldorf District Government. In addition, it makes a lot of sense that before carrying out an out-of-court debt settlement procedure, you should follow the resolution modalities (Who should send the debt settlement plan? Is the content of the debt settlement plan sufficient?) coordinate with this organization so that you also receive the required certificate after this procedure.

Related Links

  • Website of the Lower Saxony Ministry of Social Affairs, Health and Equality - Where can I get advice?
  • Completely and duly completed and signed official application form for consumer insolvency proceedings, including the investments provided (e.g. asset register, balance sheet, list of creditors and claims),
  • certificate from an authorised body of the failure of the out-of-court settlement attempt,
  • if necessary, application for the execution of the residual debt discharge procedure including the necessary declaration of assignment,
  • if necessary, application for the granting of a deferral of procedural costs.


  • You are a consumer, i.e. either
    • You are not currently engaged in or have not engaged in any self-employed economic activity in the past, or
    • Although you have carried out a self-employed economic activity in the past, your financial circumstances are manageable and there are no claims from employment relationships against you,
  • Reason for opening is available
    • Insolvency (§ 17 InsO)
    • imminent insolvency (§ 18 InsO),
  • Certificate from a legitimate body of the failure of the out-of-court settlement attempt.

Related Links

  • §§ 304 ff. Insolvency Code (InsO)
  • Download the application forms from the Lower Saxony State Justice Portal and print them out.
  • If necessary, fill out the forms together with a suitable person (e.B. lawyer) or a suitable body (debt counseling) and attach the necessary evidence.
  • Submit the application together with the other documents to the insolvency court.

The judicial consumer insolvency proceedings usually go through the following sections one after the other:

  • First, the insolvency court will examine your submitted documents. Complaints will be communicated to you in writing by the insolvency court. You must then resolve the complaint(s) within one month. If you do not do this in due time (the decisive factor is the receipt by the insolvency court), your application will be deemed to have been withdrawn.
  • If the examination of the insolvency court has shown that your application is proper, it will decide in the specific individual case, taking into account all the circumstances, whether it makes sense to carry out a judicial debt settlement procedure.
  • If the judicial debt settlement proceedings have also failed or if the insolvency court decides against the implementation of such proceedings, the insolvency court opens insolvency proceedings against your assets, provided that financing of the proceedings by the future insolvency estate is likely to be covered or secured on the basis of a deferral of procedural costs. In addition, the insolvency court appoints an insolvency administrator.
  • The insolvency administrator has the task of exploiting your (seizure-free) assets. Once the assets have been realized, the insolvency proceedings are lifted.
  • If you have filed an application for discharge of residual debt: Following the cancellation of the insolvency proceedings, the conduct of interest period begins. This generally ends with the end of the 3-year (or in a new procedure 5-year) assignment period.
  • The court appoints a trustee for the duration of the conduct of interest period. During the conduct of business period, you must fulfil certain obligations, e.B. engage in appropriate gainful employment.

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