Personal bankruptcy: what is a residual debt discharge?

The most important things at a glance:

Here you will find answers to the following questions:

The discharge of residual debts enables all natural persons who are in bankruptcy proceedings to free themselves from the claim and their creditors. Regardless of which professional path the debtor has pursued or has pursued in his past, he can apply for discharge of residual debt after insolvency proceedings. Certainly confusing at first, because most debtors are not aware that insolvency proceedings do not also mean discharge of residual debts, because this is applied for separately and completely independently of the insolvency process. In the following you will find everything you need to know about the discharge of residual debts.

How can I apply for a discharge of residual debt?

The good behavior period plays a major role here. This begins with the issued insolvency proceedings and both the conduct of business period and the proceedings have a term of 6 years . In certain normal cases, the insolvency period can also be shortened to 3 or 5 years. If certain rules are observed by the debtor during this period, the bankruptcy court approves the discharge of the remaining debt after the deadline. If this is not the case, a refusal to discharge the remaining debt will come into effect and the debtor will not be granted this. The application to refuse the discharge of residual debt is only justified, however, if a reason can really be credibly proven.

What are the reasons for refusal in the case of a discharge of residual debt?

There are certain requirements that the debtor must meet in order to obtain approval from the court. Here he should have a "clean slate", which means: he must be an honest debtor . However, it can be denied to him if, for example, he has led a wasteful life. He must not have illegally obtained any loans or public funds. In addition, the debtor must not have given false information regarding his duty to cooperate and information. If he has committed a bankruptcy offense, this is also a reason for refusal to discharge the remaining debt.

What should you watch out for if you have applied for discharge of residual debt?

There are certain consequences for the applicant as soon as the court has granted discharge of the remaining debt:

From the time of the insolvency proceedings, the debtor undertakes to assign the attachable part of his income to a trustee for an insolvency period of 6 years.

  • He is also obliged to work or to endeavor to do a reasonable job.
  • Should the debtor be awarded an inheritance, he must cede up to 50% to the trustee.
  • He is not allowed to settle claims against creditors independently during the period of bankruptcy.
  • In the event of life changes, such as moving or changing the place of work, he must inform the bankruptcy court and his appointed trustee immediately.
  • If a debtor is self-employed, payments to the trustee are to be measured as if he were an employee.
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