Germany has a particular, uniform regulation for insolvency of natural and juristic persons, which is also realized similarly in other countries all over the world. Such regulations by law shall prevent an avalanche effect of single insolvent debtors affecting their creditors, who, furthermore, could again damage their creditors, causing a ripple effect throughout an economy. Although the collective settlement of the creditors’ claims is the focus of the insolvency regulation, debt relief of insolvent debtors is an attractive characteristic, especially for the insolvent debtors. Following a certain obligation time, debt relief gives insolvent debtors a chance to take part in businesses again, to be productive, and to contribute to progress and the gross national product. Thus, insolvency regulation is justified due to economic reasons.
However, the debt relief has been discussed controversially, since it could also motivate the unreasonable use of debts. Whenever natural persons are directly liable and their personal assets are at risk, due diligence might be conducted more duteously and debts are only claimed in case they can be payed back. By contrast, insolvency, imminent illiquidity, or indebtedness might be promoted even more due to the second chance by debt relief. Moreover, a current trend of insolvency tourism indicates the attractiveness of the debt relief implementation. Since the process of debt relief takes a relatively long time in Germany, different agencies even advertise to order debt relief in the U.K., where the relief process only lasts one year.
The present assignment introduces the basics, which facilitate insolvency tourism, and deals with the issue of its applicability to juristic persons.
Inhaltsverzeichnis (Table of Contents)
- Introduction: insolvency proceedings in Germany
- Problem definition: debt relief for individuals
- Objectives and methodology: insolvency tourism into the U.K.
- Insolvency due to mismanagement of the business
- Reasons for insolvency, imminent illiquidity, and indebtedness
- Missed opportunities of extrajudicial restructuring
- Judicial insolvency proceedings in Germany
- General preconditions
- Types of insolvency proceedings
- Transfer of liabilities
- Debt relief in Germany
- Debt relief order in the U.K.
- Preconditions for insolvency tourism
- Advantages and disadvantages of insolvency tourism
- Summary and conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This assignment examines the phenomenon of "insolvency tourism", where individuals or companies seek debt relief in jurisdictions with more favorable regulations, specifically focusing on the differences between Germany and the United Kingdom. It aims to understand the underlying factors driving this trend, including the legal and economic motivations, and to analyze the implications for both individuals and companies.
- Insolvency regulations and their impact on individuals and companies
- Debt relief provisions in Germany and the U.K.
- Reasons for insolvency tourism, including the attractiveness of debt relief in the U.K.
- The legal and economic implications of insolvency tourism for individuals and companies
- The role of mismanagement in driving insolvencies
Zusammenfassung der Kapitel (Chapter Summaries)
Chapter 1 introduces the basics of insolvency proceedings in Germany, providing a context for understanding the rise of insolvency tourism. The chapter highlights the importance of insolvency regulation in preventing economic crises and examines the different types of insolvency proceedings, including the implications for individuals and companies. It also introduces the concept of debt relief, its rationale, and its potential misuse.
Chapter 1.1 focuses on the problem definition of debt relief for individuals in Germany, explaining the specific requirements and limitations of debt relief. The chapter also touches on the issue of "Personengesellschaften" and corporate debt relief, highlighting the potential overlap between private and corporate liabilities.
Chapter 1.2 outlines the objectives and methodology of the assignment, emphasizing the focus on the legal and political grounds for insolvency tourism, particularly comparing the regulations of Germany and the U.K. The chapter details the key differences in the two countries' insolvency regulations, emphasizing the attractiveness of the U.K.'s system for individuals seeking debt relief.
Chapter 2 explores the common reasons for insolvency, highlighting the role of mismanagement in the business world. It delves into the specific situations that lead to insolvency, imminent illiquidity, or indebtedness, and analyzes the different levels of responsibility for insolvency across individuals, freelancers, petty traders, and managers of corporations.
Schlüsselwörter (Keywords)
The key themes explored in this work revolve around the complex and often intertwined issues of insolvency, debt relief, insolvency tourism, and mismanagement. The analysis focuses on the legal frameworks and economic realities that contribute to these phenomena, particularly comparing the contrasting regulations of Germany and the U.K. These keywords provide a concise overview of the central concepts explored in the text.
- Quote paper
- Benjamin Klasczyk (Author), 2013, Insolvency Tourism. Private and corporate debt relief through insolvency proceedings in the U.K. and Germany, Munich, GRIN Verlag, https://www.grin.com/document/285621
