Insolvency proceedings aim at preventing creditors from realising their own claims through an individual compulsory enforcement procedure if the debtor is insolvent (§17ff. InsO). Therefore, the joint satisfaction of all creditors is sought by dividing the debtor’s assets in a special procedure (§1 InsO). The proceedings are intended to release the debtor from their residual debts. Various parties are involved in the insolvency proceedings, such as the debtor, the creditors, the insolvency court and the insolvency administrator (hereinafter “the Administrator”). The German Insolvency Regulation distinguishes between two types of proceedings, regular insolvency proceedings (corporate insolvency) and consumer insolvency proceedings (private insolvency). While the former governs the insolvency of legal entities, the latter regulates those of natural persons.
Entry into Proceedings: Filing for Insolvency
Before the German insolvency proceedings begin, the debtor (via their own application) or the creditor (in the form of an external application) must file an application for insolvency (§13 I InsO). Such an application must include one of the valid grounds for the commencement of proceedings of imminent or already occurring insolvency (§16 InsO). The competent court will examine the application and check all other conditions for the open