Insolvency

Definition

A court procedure aimed at jointly satisfying all creditors of an insolvent or over-indebted debtor.

Detailed Explanation

Insolvency proceedings are opened upon application when insolvency or over-indebtedness exists. An insolvency administrator takes over the management of assets. For companies, restructuring through an insolvency plan is possible. Natural persons can be discharged from their remaining debts after six years through a discharge of residual debt procedure.

Related Terms