What to do if you go bankrupt? – Personal bankruptcy: between debt and shame

Last year, three Styrians went bankrupt every day. On average they had debts of 104,000 euros. Vienna was the front runner with 2,881 private bankruptcies. But how do you get into this financial trouble and what can you do? The “Steirerkrone” has spoken to experts and has some advice.

Illness, unemployment, divorce: There are many reasons why your own financial situation suddenly deteriorates massively. Anyone who can no longer pay their bills is effectively over-indebted. Private insolvency proceedings can then help you get out of a financial jam. More than 1,000 Styrians went bankrupt. According to a current analysis by the credit protection association KSV1870, 1,034 Styrians had to go this route last year. “That corresponds to an average of three debt settlement proceedings per day that were opened at a Styrian district court,” calculates Rene Jonke, KSV1870 head of the southern region, in an interview with the “Krone”. The female and male proportion was quite similar at 42.7 percent to 57.3 percent. Credit protectors expect an increase again. With a 1.4 percent decrease, Styria was the only federal state with a decline in private bankruptcies, “with a decisive relief However, this is still not to be expected,” says Jonke. Because the already high expenses for daily life would continue to rise. “We also know from experience that private bankruptcies usually occur with a certain delay.” Around 1,150 bankruptcies are expected this year. Even if Styrians think twice or three times about their expenses, there are fixed costs that cannot be shaken and that are getting higher and higher. “The path to bankruptcy is not embarrassing” When you notice that you get a stomach ache as soon as you receive the mail comes, you should seek help. The sooner the better. But only a fraction of those affected start insolvency proceedings to get rid of debts. The shame is too great. “Private insolvency is always associated with a certain stigma,” says Graz lawyer Christoph Rappold (Reif und Partner law firm). “The insolvency can be viewed in public registers on the Internet, and the insolvency court often blocks the account.” Nevertheless, there is a way forward Insolvency is not a shame. “A debt-free new start in life is certainly possible,” emphasizes the lawyer based on years of experience. Existing assets are utilized. But how does the process basically work now? “Private insolvency is initiated by a so-called self-application by the debtor to the court,” explains Rappold. This is followed by an interest and execution freeze. Then asset realization begins – provided assets (such as a car or other seizable things) are available. The creditors then have to register their claims with the court within a deadline. Once all the claims are known, there are several ways to get out of the situation: The person affected can offer the creditors a restructuring plan. Twenty percent of the debts must be paid within a maximum period of five years. “If a payment plan is not possible due to poor income, the last resort is to go through the confiscation process,” explains the lawyer. Here, the income up to the subsistence level is transferred to a trustee for three years, who distributes the repayments. The debtor has to live at the subsistence level. More often there is a payment plan. A specific repayment rate is agreed that corresponds to the income situation for the next three years. The amount must be repaid within three to a maximum of seven years. The debtor is left with a minimum subsistence level. Legal support in the event of insolvency definitely makes sense, with costs of a good 1,500 euros on average. The main reason is over-confidence. The most common reasons for private bankruptcies are negligent negligence at 28 percent (financial over-confidence, poor consumer behavior and irresponsible lifestyle such as speculation) closely followed by the path to self-employment at almost 27 percent.
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