July 06, 2020/
On July 1, 2020, the German government passed a draft law to shorten the residual debt discharge procedure. In future, the procedure will only take three years instead of the previous six. This will enable over-indebted entrepreneurs, the self-employed and consumers to make a faster fresh start. However, the shortening of the procedure initially applies to consumers for a limited period.
That has changed
The most important changes at a glance:
- Temporary limitation of the shortened procedure for consumers: initially valid until 30.06.2025
- Abolition of the minimum repayment for debtors, certain duties and obligations (e.g. gainful employment) to obtain discharge of legal debt continue to apply
- New ground for refusal of residual debt discharge: incurring unreasonable liabilities during the good conduct phase
- Shorter procedure valid for applications from October 2020, for applications from 17.12.2019 the duration of the procedure will be shortened by the month