Navigation:  Home     Back to Introduction Page

German insolvency law was reformed in 1999.
The statutes applicable in the former West Germany (Konkursordnung [Bankruptcy Code], Vergleichsordnung [Judicial Composition Code]) and East Germany (Gesamtvollstreckungsordnung [Collective Enforcement Code]) were replaced by the Insolvenzordnung (Insolvency Code).
The new statute (hereinafter called "Insolvency Code") introduced provisions on consumer insolvency including the chance for a fresh start by obtaining a discharge from the court.

German insolvency law is now in the process of being reformed in three stages.

The first stage was completed on October 27, 2011, by the enactment of the "Reorganization of Business Enterprises Facilitation Act".
In this act, the legislator addressed the concerns of business enterprises against the effectiveness of the German insolvency regime.
Although reorganizations, plans, and debtor in possession proceedings were all available under the Insolvency Code, they were of very little practical importance.
In the understanding of many German insolvency representatives, reorganization was performed by selling the assets of the business entity to another entity, leaving the debts behind in the insolvency estate and distributing the proceeds from the sale of the assets to the creditors.
So the great majority of insolvency proceedings result in the liquidation of the debtor.
The new law's objective is to facilitate "real" reorganizations by giving the debtor and the creditors more influence in the proceedings.
Thus, the legislator wants to put an end to "insolvency tourism" to other countries (particularly the UK and France) by business entities relocating their COMI and individuals relocating their residence to these countries.

The second stage, the reform of consumer insolvency law, became effective on July 1, 2014.
Its main features are

This website does not include detailed information on German consumer insolvency law because it is of only minor interest for non-German judges and professionals.
You can use the email link in the left column if you are interested in specific information on German consumer insolvency law.

The third stage of the reform was completed on April 13, 2017, when the German Bundestag adopted the "Gesetz zur Erleichterung der Bewältigung von Konzerninsolvenzen" (Act on the Facilitation of Managing Enterprise Group Insolvencies). The provisions of that act do not become efective until April 21, 2018, however.
The act does not permit procedural or substantive consolidation of proceedings against debtor companies which are members of a group of enterprises.
Its main procedural means to facilitate the management of such proceedings are
The provisions of Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings of members of a group of companies apply to all cross-border insolvency proceedings within the EU opened as of June 26, 2017, however.

In addition to the changes mentioned above, the law on avoidance claims (Gesetz zur Verbesserung der Rechtssicherheit bei Anfechtungen nach der Insolvenzordnung und nach dem Anfechtungsgesetz) has been reformed as well.
The new provisions are designed to provide more certainty with regard to the outcome of avoidance actions for commercial parties and employees. Businesses had complained that the current case law made it too difficult for them to assess the voidability risk of a transaction.
For a summary on the new law please use the download link in the left column.

Links to pages with additional information:

Information on the Reorganization of Business Enterprises Facilitation Act
Information on the Reform of German Business Insolvency Law (Act of October 27, 2011)

Changes in German business insolvency law effective March 1, 2012
A One Page Summary of the Reform of German Business Insolvency Law

Changes in German laws on Avoidance Actions
A Summary of the Reform of German Avoidance Laws by Kirkland & Ellis

email to