Act on the Further Development of Restructuring and Insolvency Law (SanInsFoG)

On 14 October 2020, the Federal Ministry of Justice and Consumer Protection presented the government draft of a law on the further development of restructuring and insolvency law (SanInsFoG). Two months later, on 17 December 2020, the Bundestag adopted the bill as amended by the Legal Affairs Committee. The SanInsFoG creates pre-insolvency restructuring measures in German law for the first time.
The main implementation into national law was to take place through the Corporate Stabilisation and Restructuring Act (StaRUG). The StaRUG is considered the essential core of the Act on the Further Development of Restructuring Insolvency Law.
The SanInsFoG was largely enacted on 1 January 2021. The standards on public restructuring cases, sections 84 et seq. StaRUG, are not to enter into force until 17 July 2022. The early enactment of a major part of the law is intended to benefit in particular companies that are only threatened with over-indebtedness but are not already insolvent within the meaning of section 17 InsO. This is intended to enable these companies to restructure without insolvency proceedings.
We have compiled and explained important aspects and factors of the Act on the Further Development of Restructuring and Insolvency Law (SanInsFoG) for you.

Duty to file for insolvency in the Corona crisis – COVInsAG

In principle, the representative of a legal entity (e.g.: AG or GmbH) is obliged to file for insolvency.
The Act on the Temporary Suspension of the Obligation to File for Insolvency and on the Limitation of Directors’ and Officers’ Liability in the Event of Insolvency Caused by the COVID 19 Pandemic (COVInsAG) suspended the obligation to file for insolvency until 31 December 2020.
At the beginning of 2021, over-indebted companies will again be obliged to file for insolvency. An exemption of COVInsAG exempts, under certain circumstances, over-indebted or insolvent companies that applied for aid under state aid programmes on the occasion of the Corona pandemic between 01.11.2020 and 28.02.2021, or for which it was impossible to submit the application in the time window, from the obligation to apply.

The restructuring framework with restructuring plan

The StaRUG is intended to make it possible for the first time to intervene in creditors’ rights outside of insolvency plan proceedings. At the heart of the restructuring framework is the restructuring plan. The restructuring plan represents an out-of-court agreement between creditors and the affected company. Among other things, it regulates which payments are to be made on which “simple claims” (restructuring claims). Moreover, it is not necessary to involve all creditors in the plan.
This means: Companies are enabled to achieve restructuring outside of insolvency proceedings with this restructuring plan, which is confirmed by a majority of the creditors concerned, and then to prevent the opening of insolvency proceedings from the outset.
In principle, companies have access to the restructuring framework, but so do entrepreneurially active natural persons, according to Section 30 (1). StaRUG.
It is noteworthy, however, that employee and pension claims are not taken into account in the restructuring. If comprehensive action in these areas becomes necessary, it must be implemented outside the restructuring plan. Alternatively, the reorganisation can be carried out within the framework of self-administration proceedings or regular insolvency proceedings. For employee and pension claims, the draft law does not offer any possible solutions.

Restructuring framework in early crisis situation

The so-called restructuring procedure applies to companies that are only threatened with insolvency, section 18 InsO. Imminent insolvency is given if insolvency threatens to occur within the forecast period of basically 24 months.
The SanInsFoG illustrates the difference to over-indebtedness in that the forecast period in the case of over-indebtedness pursuant to section 19 para. 2 sentence 1 InsO is only determined for 12 months. For companies whose over-indebtedness was caused by the Corona pandemic, the shortened forecast period of 4 months applies until the end of 2021, see § 4 COVInsAG.

Role of the court in restructuring

It is important in pre-insolvency reorganisation and restructuring that the management can continue to act fully: The initiative for the restructuring plan as well as the preparation of the restructuring plan must come from the over-indebted company itself, section 17 (1) StaRUG.

However, a court may also be involved in the restructuring proceedings. This is then at the discretion of the affected companies as to whether they seek the assistance of a restructuring court during the preventive reorganisation. The centrally competent district courts are the respective restructuring courts.

The duties of the court in restructuring proceedings include:
– the implementation of the court-ordered plan reconciliation process
– Examination of central questions
– Confirmation of the restructuring plan
– Termination of mutual contracts (not yet fully performed by both parties)
The involvement of a court enables the debtor to deal fully with the restructuring plan – without any interference from creditors.
The court may in principle appoint a restructuring commissioner at its own discretion if, for example, a comprehensive stay of execution and realisation is to be obtained.
The appointment of a restructuring officer is not mandatory. Only if it is to be expected that several groups will not agree with the required majority, so that it will depend on the existence of the prerequisite of an inter-group majority decision, the appointment becomes mandatory. Only companies from the financial sector are exempt from this requirement.

Instruments of the restructuring framework

So-called instruments of the stabilisation and restructuring framework can be used as a procedural aid for the sustainable management of an impending insolvency. These instruments are set out in § 29 para. 1 and para. 2 StaRUG.
Instruments within the meaning of § 29 para. 1 StaRUG are:

1. the judicial plan ballot: conducting a judicial plan ballot procedure
2. preliminary examination: judicial preliminary examination of issues relevant to the confirmation of the restructuring plan
3. stabilisation: court order of regulations restricting measures of individual legal enforcement
4. plan confirmation: judicial confirmation of a restructuring plan

In order to be able to make use of one of the instruments, the restructuring project including the draft restructuring plan or restructuring concept must be notified to the competent restructuring court (by the debtor company).
Upon notification to the competent restructuring court, the restructuring case becomes pending. This gives the company access to the instruments. Access shall be granted until the pendency of the restructuring case. This concerns a period of maximum 6 – in case of a renewed advertisement maximum 12 – months.

You are welcome to contact us if such a reorganisation and restructuring procedure is considered as a solution for your company during the crisis. Together with you, we create an individual plan that is best tailored to your needs.


Corona-related reduction in commercial space rent

On 01.01.2021, a new law came into force in which the widely discussed and controversial issue of rent adjustment of commercial premises for those rental premises that could not be used by the tenants due to an official order is now regulated. The new provision in Art. 240, § 7 of the Introductory Act to the German Civil Code (EGBGB) contains a statutory presumption on the disturbance of the basis of the contract pursuant to § 313 BGB. If the conditions are met, this can justify an adjustment of the contract or, if the latter is not possible, even grounds for termination.

The consequences of the officially ordered closures in the context of the Covid 19 pandemic were previously very contentious and handled differently. Often, the respective tenants were able to agree on amicable solutions. However, where this was not possible, the courts ruled and came to different conclusions. While the Regional Court of Heidelberg in a judgment of 30 July 2020 (Case No. 5 O 66/20) argued against an adjustment because the risk of the use of the leased property lay with the tenant, the Regional Court of Munich I in a judgment of 22 September 2020 (Case No. 3 O 4495/20) held that an adjustment of the rent was necessary and required. Some courts considered the regulations in the Covid 19 Pandemic Effects Act as final special regulations, so that the general statutory regulations would not apply. With regard to terminations of rented premises, this law provides for a twofold exclusion of the possibility of termination.

The new provision of Art. 240, § 7 EGBGB is now intended to create a basically uniform solution to this problem. Accordingly, it is legally presumed that in the case of officially ordered closures due to the Corona pandemic, which significantly restrict the use of the commercial leased premises, a circumstance within the meaning of section 313 para. 1 BGB exists, which has become the basis of the contract and has later changed seriously and unforeseeably. This allows for a legal claim to adjust the contract and thus, for example, to reduce the rent. For this purpose, it must be shown in each case that the parties would not have concluded a contract with the same content if they had been aware of these circumstances and that it would be unreasonable for them to adhere to the contract. The unreasonableness can be demonstrated, for example, by the existence of considerable turnover losses and the lack of compensation through state aid.

As a result, the contract can be adjusted and otherwise, if an adjustment is not possible, even terminated on the basis of section 313 (3) BGB. An adjustment can be made in various ways, for example, in addition to a reduction of the rent, a deferment or other arrangements left to the parties themselves. The provision also applies accordingly to lease agreements. Normally, the requirements of section 313 (1) BGB are only met in special exceptional cases – accordingly, the existence of a circumstance within the meaning of section 313 (1) BGB has been highly controversial until now.
Although the new regulation does not mean security of tenure for either tenant, the uncertainties that existed in case law have been eliminated and the negotiating positions of commercial tenants have been strengthened. In essence, however, the generally applicable principles were affected neither with regard to the disturbance of the basis of the contract nor with regard to tenancy law. Ultimately, the factual and thus the legal situation can therefore still vary in individual cases and requires a weighing of the respective interests.

For example, in a judgement of 12 February 2021 (Case No. 31 O 11516/20), the LG München I ruled that in the case of the department stores’ chain C&A there was no unreasonableness within the meaning of Section 313 of the German Civil Code (BGB), with the consequence that the full rent was to be paid despite the closure measures due to the pandemic.
According to the court, it was reasonable for the tenant “in general and also on the basis of the results from the previous three business years” to form reserves. The court came to this conclusion despite a decline in turnover at C&A of about 80 per cent. When examining the reasonableness, the court used the turnover of the specific branch as a basis for the distribution of risk, without including other branches. In addition, state aid (e.g. short-time allowance) as well as the turnover generated by the online shop should also be taken into account in the assessment. Although the prerequisites for a disturbance of the basis of the contract according to § 313 of the German Civil Code (Bürgerliches Gesetzbuch – BGB) were in principle met, the court was of the opinion that the circumstances of the individual case could not lead to an adjustment of the obligation to pay rent. Rather, “only that legal consequence may be sought which gives appropriate weight to the interests of both contracting parties worthy of protection”. Moreover, in this case there was no right to reduce the rent according to the general tenancy law, as there was no defect cancelling the contractual use in the sense of § 536 para. 1 BGB. Furthermore, there was no impossibility and the suitability of the rental object had also not ceased to exist during the period in question.

The tenant is even obliged to form reserves to an appropriate and reasonable extent, according to the LG München I in its judgement of 25 January 2021 (Case No. 31 O 7743/20). This obligation resulted from the tenant’s liability for his own solvency irrespective of fault. The circumstance of the pandemic does not change this, as it quickly depletes reserves. It is true that state aid can be lower precisely because of reserves, but this is also irrelevant, since there is no need for financial aid if there are sufficient reserves.

In view of the fact that both parties were equally exposed to the economic risk of usability, the court stated that a ratio of 50:50 was appropriate with regard to the distribution of risk. Nevertheless, the circumstances of the individual case had to be taken into account appropriately within the framework of a balancing of interests.

In this context, the newly introduced Article 240 § 7 EGBGB only had a clarification function. The claim for adjustment of the contract under section 313 BGB did not necessarily require a threat to existence. Rather, the conflicting interests must be weighed against each other, so that certain circumstances of the individual case can justify exceptions. That was the case here.

In addition, the Introductory Act to the Code of Civil Procedure (EGZPO) also contains a new regulation. Pursuant to section 44 EGZPO, there is a prohibition of priority and acceleration in proceedings concerning an adjustment of the rent for commercial rented premises based on the above-mentioned regulations. On the basis of this, the early first date should take place at the latest after the expiry of one month after service of the statement of claim.

In particular, the new regulations are also retroactively applicable to all periods from April 2020 onwards, even if there were already restrictions on the use of the tenancy at that time due to orders issued by the authorities.

The applicability to new contracts, however, is likely to be more difficult, as the parties are regularly already aware of the risk of the pandemic when concluding the contract. It is therefore advisable for landlords to include a standard “corona clause” in the contracts. This can ensure the necessary flexibility in the event of a dispute.
We will be happy to advise you further on this topic. Contact us!


Suspension of the obligation to file for insolvency

Renewed suspension of the obligation to file for insolvency

Despite the government’s “Corona protection shield”, the Corona crisis caused very severe financial losses for many entrepreneurs, leading to insolvency. As a result, the COVID 19 Pandemic Mitigation Act was introduced back in March, which regulated the suspension of the insolvency filing requirement until 30 September 2020.
The normally applicable period of a maximum of three weeks from the occurrence of insolvency or over-indebtedness pursuant to section 15a of the Insolvency Code (InsO) was thus considerably extended. Within three weeks of the existence of a ground for insolvency, the debtor must examine whether an insolvency petition must be filed. Furthermore, the application must be made in the affirmative. Insolvency exists if the debtor is no longer able to meet the payment obligations due (section 17 InsO). Over-indebtedness is given if the assets no longer cover the existing liabilities and there is a negative prognosis for continuation (§ 19 InsO). Pursuant to section 15 (1), the following persons are entitled to file an application for commencement of proceedings 1 InsO, in addition to the creditors, each representative body, or each personally liable partner, as well as each liquidator. As a rule, a review period of 3 weeks is granted to those subject to the application. However, this is a case-by-case decision.
While many expected a significant wave of insolvencies in autumn 2020 as a result, the federal government acted and partially suspended the insolvency filing requirement again, this time until 31 December 2020. However, the new suspension only applied to the insolvency ground of over-indebtedness, not to that of insolvency. The reason for this is that the chances of permanently averting insolvency are lower for insolvent companies than for those that are merely over-indebted. In this way, the necessary confidence in economic transactions should be maintained.
Currently, the suspension of insolvency is to be extended again until the end of April according to a formulation aid approved by the Federal Cabinet. In this way, the federal government wants to further accommodate the burden on economic life and mitigate the consequences. In particular, this new scheme is intended to provide further assistance to those debtors who are entitled to financial assistance from the Corona assistance programmes that has yet to be paid out. However, these must be applied for by 28.02.2021 and must be suitable for the elimination of insolvency maturity. In exceptional cases, it is not a question of the application for the aid funds, but only of the entitlement to apply. This shall apply in such cases where it is not legally or factually possible for a person concerned to submit an application by 28.02.2021.
In addition, the reason for the insolvency maturity must be the pandemic. The state aid was thus intended to give the respective companies a “chance to survive”.
These new rules are to apply from 01.02.2021. They thus directly follow the previous regulations.
We will be happy to advise you on this topic and keep you up to date.


Corporate restructuring - UPDATE!

Reorganisation of a company through the insolvency plan procedure


Corona-related wave of insolvencies expected

The Corona crisis is causing unbearable financial losses for many companies, which, despite the “protective umbrella” that has been set up as a result, has already led many to the point of insolvency.

Nevertheless, the numbers of insolvency applications are surprisingly low so far: the reason for this is the law introduced in March to mitigate the consequences of the COVID 19 pandemic in civil, insolvency and criminal procedure law.

This has suspended the obligation to file for insolvency until 30 September 2020.

In principle, there is a duty to file for insolvency pursuant to § 15a Insolvency Code (InsO). An application must be filed immediately after the occurrence of insolvency or overindebtedness, but within three weeks at the latest. Insolvency exists if the debtor is no longer able to meet the payment obligations due (section 17 InsO). Over-indebtedness is given if the assets no longer cover the existing liabilities (§ 19 InsO). Pursuant to section 15 (1), the following persons are entitled to file an application for commencement of proceedings 1 InsO, in addition to the creditors, each representative body, or each personally liable partner, as well as each liquidator. As a rule, a review period of 3 weeks is granted to those subject to the application. However, this is a case-by-case decision.

As a result, the new law means that countless companies will delay their insolvency until the autumn, even though they have long been insolvent. As a consequence, the debt mountain of these companies only grows. The courts therefore expect an extreme wave of insolvency petitions in autumn.

Have insolvency plan proceedings examined!

One way of overcoming the crisis is the insolvency plan procedure as a strategy for restructuring a company.

Within the framework of this, those affected can make individual arrangements compared to the regular procedure under the Insolvency Code in order to potentially safeguard their business. Thus, in addition to reorganisation or transferring reorganisation, liquidation of the company or a mixture of both can be sought. Restructuring under company law or a possible transfer of shares to the creditor are also possible with the implementation of insolvency plan proceedings and can help through the crisis.

When designing the plan, many different options are open to the creator, so that an individual solution can be created for each company. Among other things, creditors can be satisfied in various ways, for example by a quota payment from the existing assets or one from later proceeds. As long as the affected creditors are not worse off as a result of the insolvency plan than they would be in regular insolvency proceedings, the structuring options are free and can also be combined.

Because the insolvency plan is part of the regular insolvency proceedings, an insolvency petition must have been filed first. In principle, this only has to fulfil the usual requirements mentioned above. Only insofar as a protective shield procedure is to be linked to the insolvency or the plan procedure is to be carried out on one’s own responsibility must further special requirements be fulfilled.

The plan proceedings are then filed with the competent court upon submission of the insolvency plan. The submission may be made by the insolvency administrator or the insolvency debtor. It is also possible for the creditors’ meeting to commission the insolvency administrator to draw up an insolvency plan.

How do you approach the process?

The submitted plan shall contain, according to the law, a representational and a formative part.

The purpose of the former is to make the consequences of the plan known to those affected by it and to assess them so that they can give their necessary consent. A settlement calculation shows the creditors to what extent their chances of satisfaction are improved by the plan. In the end, the descriptive part thus contains all the necessary information about the planned measures.

The formative part then shows in a precise manner how the changes, i.e. the deviations from the regular insolvency proceedings, are to be made in concrete terms. Various measures under company law are possible, for example capital increases or decreases, the payment of contributions in kind or also the intervention in shareholders’ share rights. This could lead to a so-called “debt-equity-swap”, in which creditor claims are converted into share rights. Conversion measures or the change of legal form are also possible, among other things.

After a preliminary examination by the insolvency court, the creditors vote on the insolvency plan. This legitimises it. If the required majority is reached here, the court confirms the insolvency plan that was adopted by the creditors’ meeting. The subsequent confirmation order finally makes the insolvency plan effective. The envisaged regulations will be implemented. The effect also applies to those creditors who have not agreed to the insolvency plan or who have not filed their claims.

We advise you on all aspects of the proceedings.

You are welcome to contact us if such an insolvency plan procedure comes into consideration as a solution for your company during the crisis. Together with you, we create an individual plan that is best tailored to your needs.

UPDATE!


Partially extended suspension of the obligation to file for insolvency

Following the suspension of the insolvency filing requirement as a result of the Corona crisis until 30 September 2020, many expected a significant wave of insolvencies in the autumn.

Now the suspension has been partially extended even further. For the insolvency ground of over-indebtedness, the obligation to file for insolvency is now suspended until 31 December 2020.

However, this does not apply to the reason for insolvency: Here, it remains the case that the insolvency application must be filed by 30 September at the latest. The reason for this is that the chances of permanently averting insolvency are lower for insolvent companies than for those that are merely over-indebted. In this way, the necessary confidence in economic transactions should be maintained.

Can we help you? Start your renovation right here!

    Wenn Sie die im Kontaktformular eingegebenen Daten an uns übersenden, erklären Sie sich damit einverstanden, dass wir Ihre Angaben für die Beantwortung Ihrer Anfrage bzw. Kontaktaufnahme verwenden. Wir benötigen Ihre Emailadresse, um Ihre Anfrage beantworten zu können. Weitere Angaben sind keine Pflichtangaben. Die abgesendeten Daten werden verschlüsselt übertragen und nur zum Zweck der Bearbeitung Ihres Anliegens verarbeitet. Weitere Informationen auch zu Widerrufhinweisen finden Sie in unserer Datenschutzerklärung


    Corporate restructuring

    Corporate restructuring through the insolvency plan procedure


    Corona-related wave of insolvencies expected

    The Corona crisis is causing unbearable financial losses for many companies, which, despite the “protective umbrella” that has been set up as a result, has already led many to the point of insolvency.

    Nevertheless, the numbers of insolvency applications are surprisingly low so far: the reason for this is the law introduced in March to mitigate the consequences of the COVID 19 pandemic in civil, insolvency and criminal procedure law.

    This has suspended the obligation to file for insolvency until 30 September 2020.

    In principle, there is a duty to file for insolvency pursuant to § 15a Insolvency Code (InsO). An application must be filed immediately after the occurrence of insolvency or overindebtedness, but within three weeks at the latest. Insolvency exists if the debtor is no longer able to meet the payment obligations due (section 17 InsO). Over-indebtedness is given if the assets no longer cover the existing liabilities (§ 19 InsO). Pursuant to section 15 (1), the following persons are entitled to file an application for commencement of proceedings 1 InsO, in addition to the creditors, each representative body, or each personally liable partner, as well as each liquidator. As a rule, a review period of 3 weeks is granted to those subject to the application. However, this is a case-by-case decision.

    As a result, the new law means that countless companies will delay their insolvency until the autumn, even though they have long been insolvent. As a consequence, the debt mountain of these companies only grows. The courts therefore expect an extreme wave of insolvency petitions in autumn.

    Have insolvency plan proceedings examined!

    One way of overcoming the crisis is the insolvency plan procedure as a strategy for corporate restructuring.

    Within the framework of this, those affected can make individual arrangements compared to the regular procedure under the Insolvency Code in order to potentially safeguard their business. Thus, in addition to reorganisation or transferring reorganisation, liquidation of the company or a mixture of both can be sought. Restructuring under company law or a possible transfer of shares to the creditor are also possible with the implementation of insolvency plan proceedings.

    When designing the plan, many different options are open to the creator, so that an individual solution can be created for each company. Among other things, creditors can be satisfied in various ways, for example by a quota payment from the existing assets or one from later proceeds. As long as the affected creditors are not worse off as a result of the insolvency plan than they would be in regular insolvency proceedings, the structuring options are free and can also be combined.

    Because the insolvency plan is part of the regular insolvency proceedings, an insolvency petition must have been filed first. In principle, this only has to fulfil the usual requirements mentioned above. Only insofar as a protective shield procedure is to be linked to the insolvency or the plan procedure is to be carried out on one’s own responsibility must further special requirements be fulfilled.

    The plan proceedings are then filed with the competent court upon submission of the insolvency plan. The submission may be made by the insolvency administrator or the insolvency debtor. It is also possible for the creditors’ meeting to commission the insolvency administrator to draw up an insolvency plan.

    How do you approach the process?

    The submitted plan shall contain, according to the law, a representational and a formative part.

    The purpose of the former is to make the consequences of the plan known to those affected by it and to assess them so that they can give their necessary consent. A settlement calculation shows the creditors to what extent their chances of satisfaction are improved by the plan. In the end, the descriptive part thus contains all the necessary information about the planned measures.

    The formative part then shows in a precise manner how the changes, i.e. the deviations from the regular insolvency proceedings, are to be made in concrete terms. Various measures under company law are possible, for example capital increases or decreases, the payment of contributions in kind or also the intervention in shareholders’ share rights. This could lead to a so-called “debt-equity-swap”, in which creditor claims are converted into share rights. Conversion measures or the change of legal form are also possible, among other things.

    After a preliminary examination by the insolvency court, the creditors vote on the insolvency plan. This legitimises it. If the required majority is reached here, the court confirms the insolvency plan that was adopted by the creditors’ meeting. The subsequent confirmation order finally makes the insolvency plan effective. The envisaged regulations will be implemented. The effect also applies to those creditors who have not agreed to the insolvency plan or who have not filed their claims.

    We advise you on all aspects of the proceedings.

    You are welcome to contact us if such an insolvency plan procedure comes into consideration as a solution for your company. Together with you, we create an individual plan that is best tailored to your needs.

    Can we help you? Start your renovation right here!

      Wenn Sie die im Kontaktformular eingegebenen Daten an uns übersenden, erklären Sie sich damit einverstanden, dass wir Ihre Angaben für die Beantwortung Ihrer Anfrage bzw. Kontaktaufnahme verwenden. Wir benötigen Ihre Emailadresse, um Ihre Anfrage beantworten zu können. Weitere Angaben sind keine Pflichtangaben. Die abgesendeten Daten werden verschlüsselt übertragen und nur zum Zweck der Bearbeitung Ihres Anliegens verarbeitet. Weitere Informationen auch zu Widerrufhinweisen finden Sie in unserer Datenschutzerklärung


      Shortened residual debt discharge proceedings

      Shortened residual debt discharge proceedings


      According to a new draft law of the federal government, a new and shortened residual debt discharge procedure is to be introduced in the future.
      This serves to free a debtor from his debts after a few years have passed, so that he has the possibility of a new economic start. Previously, this was only possible after six years. With the draft of 01.07.2020, the discharge of residual debt is now to take place after just three years. Thus, the EU Restructuring Directive 2019/2023 will be implemented in Germany.
      The new procedure is to be understood as a part of the economic stimulus and crisis management package adopted in the context of the Corona crisis. For all consumer insolvency proceedings opened after 1 October 2020, there is generally a possibility of a settlement. thus the possibility to make use of the shortened residual debt discharge procedure. This is particularly intended to help those who have been driven into insolvency by the Corona pandemic. In particular, no further requirements have to be met for the discharge of residual debt – up to now, for example, the coverage of procedural costs had to be guaranteed.
      In principle, all debtors should benefit from the new residual debt discharge procedure. However, for consumers – i.e. private individuals – there is a time limit until 30 June 2025. The Federal Government will decide whether this deadline will be waived in the future in accordance with a report submitted by 30 July 2024.
      However, the regulations for the case of renewed insolvency must be observed. Should this occur, a blocking period of eleven years is provided for a new discharge of residual debt. In addition, residual debt discharge proceedings will then have a longer duration of five years instead of three.
      In addition, debtors may be obliged to surrender acquired assets while they are in the “good conduct phase”. Unreasonable liabilities may stand in the way of residual debt discharge proceedings at this time.
      In the end, the new draft was the subject of numerous criticisms by experts and also by the Committee on Legal Affairs and Consumer Protection. Especially because of the differentiating regulations for entrepreneurs and consumers, further revisions are considered necessary. Otherwise, there is a risk of practical and systematic problems. In principle, however, the shortened residual debt discharge procedure is welcomed.
      Until a final regulation has come into force, it is therefore advisable to wait before submitting applications. In this context, the fact that retroactivity can be considered must also be taken into account. This is legally possible, as it is a favourable regulation for the debtors concerned. Any applications already filed may be withdrawn until the opening of insolvency proceedings pursuant to section 13 of the Insolvency Code.