Insolvency plan proceedings

Judicial Plan

If the out-of-court debt settlement plan fails, the debtor can file an application for the initiation of consumer insolvency proceedings with the competent insolvency court within six months. If a so-called majority in terms of heads and sums is achieved in the out-of-court debt settlement plan, an application for the judicial debt settlement procedure can be made along with the insolvency application. The court has the authority to decide on approving a “judicial settlement.” In this case, the latest version of the debt settlement plan becomes the approved settlement. The debtor receives a payment plan with all the necessary information to set up standing orders for the settlement payments.

Important to know

Requirements

All creditors are known

You must be absolutely certain that you know all your creditors since only the creditors who agree to the proposal become part of the judicial settlement. Otherwise, unidentified creditors may garnish your assets, which can lead to the failure of the settlement.

Financial stability

You must be certain that you can meet the agreed-upon payments throughout the entire duration, as the judicial settlement can be terminated by the creditor in case of non-payment of two installments.

Duration

The duration corresponds to the duration of the out-of-court debt settlement plan. It can be individually adjusted to your financial situation but generally does not exceed three years. There is also the possibility of immediate debt relief through a lump sum payment.

Amount to pay

The payments to be made are based on the last out-of-court debt settlement plan where a majority in terms of heads and sums was achieved.

No account or wage garnishments

By applying for a judicial debt settlement plan, we will file a request for the suspension of all garnishment measures, ensuring that no garnishments that would jeopardize the plan are possible during the court proceedings.

Credit score (Schufa)

Unfortunately, unlike the insolvency procedure, your credit score will only become positive again three years after the payment of the final installment.

Further steps

1. Contact

Contact us today and arrange an individual consultation appointment as soon as possible.

3. Contacting the creditors

If you decide on debt relief with SchuldenfreiBerlin, we will first contact your creditors and request the current status of all liabilities with the submission of your power of attorney. From this point on, we will be the sole point of contact to relieve you as much as possible.

5. Out-of-court settlement attempt

This is, in simplified terms, an attempt to negotiate with the creditors, offering them only the attachable portion of your net income. If not all creditors agree to this proposal, an insolvency application can be filed with the competent local court. More Information

7. Initiation of insolvency proceedings

Two to four weeks after submitting the insolvency application to the competent local court, the insolvency proceedings will be initiated, and the three-year period will begin. Additional information: More Information

9. Establishment of the judicial plan

If this majority in terms of heads and sums is achieved, the judicial plan is established. The court will send you the plan, along with an instruction to comply with the specified payments.

2. Free initial consultation

In the free and non-binding initial meeting, you will personally meet us and the debt advisor responsible for you. Please bring all available creditor documents to the meeting so that we can get an overview of your financial situation. Afterwards, your advisor will show you the best way out of debt and explain the costs involved.

4. Compilation of all liabilities

After contacting your creditors, we will compile a list of your liabilities based on this information. We will need this list for further negotiations.

6. Signing the insolvency application:

As the final step after the failure of the out-of-court settlement attempt, we will arrange an appointment with you to sign the insolvency application in person. Our lawyer will go through the entire insolvency application with you and explain everything in detail during the personal conversation.

8. Sending the judicial plan to all creditors

Within one month, the creditors must provide their response to the plan. If individual or multiple creditors fail to respond, it will be considered as their consent to the submitted plan. However, even if several creditors reject the plan, the insolvency court can convert this rejection into approval upon the debtor's request if more than half of the creditors have agreed and the total amount of claims from the approving creditors represents more than half of the known overall debts (known as "majority in terms of heads and sums").

10. Debt discharge

After the expiration of the 3-year period (or any other agreed-upon duration), all remaining debts will be discharged, and you will become debt-free again! More Information

1. Contact:

Contact us today and arrange an individual consultation appointment as soon as possible.

2. Free initial consultation

In the free and non-binding initial meeting, you will personally meet us and the debt advisor responsible for you. Please bring all available creditor documents to the meeting so that we can get an overview of your financial situation. Afterwards, your advisor will show you the best way out of debt and explain the costs involved.

3. Contacting the creditors

If you decide on debt relief with SchuldenfreiBerlin, we will first contact your creditors and request the current status of all liabilities with the submission of your power of attorney. From this point on, we will be the sole point of contact to relieve you as much as possible.

4. Compilation of all liabilities

After contacting your creditors, we will compile a list of your liabilities based on this information. We will need this list for further negotiations.

5. Out-of-court settlement attempt

This is, in simplified terms, an attempt to negotiate with the creditors, offering them only the attachable portion of your net income. If not all creditors agree to this proposal, an insolvency application can be filed with the competent local court. More Information

6. Signing the insolvency application

As the final step after the failure of the out-of-court settlement attempt, we will arrange an appointment with you to sign the insolvency application in person. Our lawyer will go through the entire insolvency application with you and explain everything in detail during the personal conversation. Additional information: Link 2.

7. Initiation of insolvency proceedings

Two to four weeks after submitting the insolvency application to the competent local court, the insolvency proceedings will be initiated, and the three-year period will begin. More Information

8. Sending the judicial plan to all creditors

Within one month, the creditors must provide their response to the plan. If individual or multiple creditors fail to respond, it will be considered as their consent to the submitted plan. However, even if several creditors reject the plan, the insolvency court can convert this rejection into approval upon the debtor's request if more than half of the creditors have agreed and the total amount of claims from the approving creditors represents more than half of the known overall debts (known as "majority in terms of heads and sums").

9. Establishment of the judicial plan

If this majority in terms of heads and sums is achieved, the judicial plan is established. The court will send you the plan, along with an instruction to comply with the specified payments.

10. Debt discharge

After the expiration of the 3-year period (or any other agreed-upon duration), all remaining debts will be discharged, and you will become debt-free again! More Information

If you would like more detailed information about the judicial plan, you can find it here.

Additional information