If everything is not going well, it is helpful to have someone by your side to support you. This also applies in the event of economic difficulties. If your own company is in a crisis or if private debts weigh on your mind, good advice is valuable.
Many people are afraid of bankruptcy proceedings, but this does not always have to happen. Since insolvency law is a very complex area of law and the consequences of inaction could be very serious, a lawyer specializing in insolvency law should always be consulted.
In the following, we will explain how the lawyer with a focus on insolvency law will provide you with specific support and what added value advice offers.
What does a bankruptcy attorney do?
Contrary to what one might initially assume, a bankruptcy attorney specializing in insolvency law is not only active in the context of insolvency. Even in the run-up to insolvency, a lawyer with a relevant focus can help and perhaps even avert bankruptcy.
Due to the serious consequences of insolvency for debtors and creditors, the primary goal of any advice from a lawyer specializing in insolvency law should be to prevent this by taking appropriate measures.
First of all, this includes getting a complete overview of the debtor’s situation. Because only then can the lawyer make a meaningful assessment of the legal situation and thus determine the best course of action for the client. This applies to corporate insolvency as well as personal insolvency.
However, professional support should be called in even in this situation. Because of the complexity of the legal situation and the far-reaching consequences for those involved, it is not enough to read a few legal tips in the run-up to the negotiations.
Ideally, the assessment of the situation should be left to a lawyer who specializes in insolvency law. He can design the agreement in such a way that, for example, the creditor is not exposed to the risk of rescission and the debtor effectively eliminates any insolvency that may exist.
What is the difference to an insolvency administrator?
The difference between a lawyer specializing in insolvency law and an insolvency administrator is that the lawyer advises his client in a neutral manner on legal issues and represents him in court. He can also continue to advise the client in the context of insolvency.
However, many people first seek advice from a solicitor, usually acting as an insolvency practitioner, when they find themselves in financial difficulties. It becomes problematic when the lawyer frequently acts as an insolvency administrator and is appointed as such by the court in the matter of the person seeking advice.
In the first place, it is his job to determine and secure all of the debtor’s realizable assets in the event of insolvency and ultimately to distribute them to the creditors.
The insolvency administrator is appointed by the competent local court and exercises this office for the duration of the insolvency. According to insolvency law, a natural person who is suitable for the respective individual case, in particular who is knowledgeable in business and independent of the creditors and the debtor, is to be appointed.
This person is to be selected from among all persons willing to take on insolvency administration. The insolvency courts keep a so-called pre-selection list for this purpose. As a rule, people with the appropriate specialist knowledge apply, for example a lawyer. However, working as a lawyer is generally not a must.
How can you say that a lawyer has special knowledge of insolvency law?
You can tell that a lawyer has special knowledge in the field of insolvency law by the fact that he or she has a corresponding specialist lawyer title. In this case, this would be a specialist lawyer for insolvency law.
Furthermore, you should inquire whether the lawyer you are considering has references that identify him as an expert in the field of insolvency law in addition to the additional qualification as a specialist lawyer. You can usually find these on the law firm’s website. If not, ask your trusted lawyer about it. He will be happy to show you around.
It can also do no harm to find out about the lawyer on the Internet. On various portals there is usually an evaluation nowadays, maybe also for the special lawyer.
It also happens that the lawyer gives detailed legal tips on topics related to insolvency and insolvency law on his own website. The legal tips can usually be used to clarify initial questions. If this is the case and if the legal tips are written in an understandable way, that is a good sign and nothing stands in the way of contacting the lawyer.
Is it possible to avoid insolvency proceedings despite payment difficulties?
When assessing the question of whether insolvency proceedings can be avoided in the event of payment difficulties, the individual case is decisive. If there are actually only payment difficulties in the sense of a payment delay, there would be no obligation to file for insolvency even for companies.
However, if there is insolvency, companies in certain legal forms are required to apply.
According to insolvency law, consumers are generally not obliged to file for insolvency and thus initiate personal insolvency. However, delaying for too long can have a negative effect on the discharge of residual debt.
What added value does advice from a lawyer on insolvency law offer companies?
Companies that are in economic difficulties should definitely consult a lawyer who advises on insolvency law. As already explained above, he ideally has the additional qualification “Specialist Lawyer for Insolvency Law”.
Insolvency law is very complex and, in the worst case, provides for considerable liability risks, especially for the management of a company. This is especially true if the obligation to file for insolvency was not observed or if insolvency was deliberately postponed.
In addition to personal liability, this can mean that the company cannot continue as usual. Had we acted in time, this might have been possible.