German law · English information
Ordinary proceedings generally apply to companies and people currently carrying on a self-employed business. Formerly self-employed individuals may qualify for consumer proceedings, depending on their creditors and liabilities.
Application and court review
A debtor may submit its own application. A creditor must meet the statutory requirements and substantiate its claim and the grounds for opening proceedings. An insolvency application is not an unrestricted debt-collection tool. Interim measures must be interpreted using the actual court order.
Opening and verification of claims
On opening ordinary proceedings, the power to administer and dispose of estate assets generally passes to the administrator. Creditors lodge claims with the administrator. A disputed claim may require a determination procedure; lodging a claim does not guarantee payment.
Realisation, distribution and discharge
The business may continue, be sold or close. Distributions depend on available assets after realisation and examination of claims. Neither a dividend nor a total duration can responsibly be guaranteed in advance. Individuals may apply for discharge; the usual three-year assignment period runs from opening and is distinct from the time needed to realise assets.
Related information
Procedures overview · Creditor rights · Corporate insolvency
Official German Insolvency Code · Official StaRUG
Practical implementation
Separating procedural stages and responsibilities
After filing, the court investigates the opening conditions and may order protective measures. Upon opening, authority over estate assets generally passes to the administrator. Claim filing, verification, reporting and realisation are distinct stages. The opening order identifies contacts and relevant dates. Creditors should review it fully and identify the correct debtor. Proceedings concerning an affiliated company do not replace filing against the entity that actually owes the debt.
Understanding ranking and distributions
Insolvency claims, estate liabilities and subordinated claims receive different treatment. Legal basis, accrual and any special statutory rule are decisive. Issuing an invoice after opening does not turn an old claim into an estate liability. Security rights need separate consideration alongside ordinary filing. Even an admitted claim does not guarantee payment: distributions depend on estate assets and costs. Expected recoveries should therefore be distinguished from nominal claim values.
Four practical examples
The following scenarios are illustrative examples, not reports of client matters. The outcome depends on the facts and applicable rules.
Example 1: A late invoice
A consultant invoices after opening for work completed beforehand. Invoice date alone does not determine ranking. The contract, service period and accrual must be reviewed before estate priority is asserted.
Example 2: Two related companies fail
A supplier dealt with both a parent and a subsidiary. The claims must be allocated to the relevant proceedings using orders, invoices and contractual records. A combined submission may obscure the identity of the actual debtor.
Example 3: A filed claim is disputed
The administrator challenges a claim. The creditor should identify the objection, any existing judgment and missing evidence. Whether litigation is needed, and which party must initiate it, depends on the procedural position.
Example 4: Opening is refused for lack of assets
There will be no ordinary distribution in opened proceedings. Enforcement options, security and claims against other obligors require separate review. Refusal to open does not automatically establish personal liability of a director.
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