Insolvency Code (InsO)

The Insolvency Code (InsO) is the central law in Germany that meticulously regulates the proceedings of an insolvency case, replacing the former bankruptcy and composition law on January 1, 1999. It defines how an orderly settlement between creditors and debtors is achieved in cases of insolvency or over-indebtedness of a company or private debtor. Key areas of the InsO include the regular insolvency proceedings for companies, consumer insolvency proceedings for individuals, and the plan procedure, which allows for individual restructuring solutions through an insolvency plan. Important sections include § 15a InsO, which obligates managing directors to file for insolvency in a timely manner, § 270 ff. InsO regarding self-administration, and § 274 InsO concerning the termination of proceedings. The Insolvency Code also sets the conditions for discharge of residual debt, allowing honest debtors a fresh economic start after six years – regularly after three years since 2020. For creditors, the law provides clear priorities for claim registration and satisfaction. Anyone facing impending insolvency should be familiar with the fundamental regulations of the InsO and consult a specialized insolvency lawyer early on.