Reform of Insolvency Law
Reforming insolvency law is among the most important endeavours of the Federal Government in the broad field of economic law. Of course, the financial and economic crisis also tested the limits of insolvency law.
Overall, the Insolvency Statute proved itself, but weak points were exhibited as well. At the same time, the crisis in the financial markets brought with it completely new challenges. Politics must learn from this and amend laws in such a way that enables crises to be coped with successfully. In this manner, Germany as an economic location will be better equipped to face the future. The Federal Government is determined to approach this task in the field of insolvency law in three phases.
The goal of the first phase is to have insolvency law be increasingly understood as an opportunity to reorganise a company. This requires reforms in the planning procedure and in self-administration. These reforms will help result in insolvency motions being filed in a more timely manner, allowing the opportunities for reorganisation to be used more effectively. This first phase also intends to create a reorganisation procedure for system-relevant credit institutes. In addition, the Insolvency Statute is to be modified with regard to clearinghouses; work will begin on insolvency statistics; and the privileges of the social welfare funds in challenging insolvency are to be abolished.
The second phase will focus on reforming consumer insolvency law. Specifically, the long period of good conduct to attain discharge from remaining debt must be shortened. We will also assess whether a new reorganisation procedure, which would be a step before insolvency, should be introduced.
The third phase will reflect on rules for company insolvencies and insolvency administrators.