The federal government is currently taking precautions to prevent a possible wave of insolvencies among companies. "For this purpose, a temporary relief in the obligation to file for bankruptcy due to over-indebtedness should be introduced," said a spokesman for the Federal Ministry of Justice of the German Press Agency on request. The "Handelsblatt" had previously reported on it.
There should also be a change in the overindebtedness criteria. According to current law, over-indebtedness comes into consideration when the continued existence of a company over a period of one year is no longer predominantly likely. According to the ministry, the forecast period should be reduced from one year to four months. According to the information, over-indebted companies would be exempt from the obligation to apply for over-indebtedness "if their continued existence over the shortened forecast period is sufficiently likely," the spokesman continued.
According to the current regulations, an application for insolvency must be filed no later than three weeks after the onset of insolvency and six weeks after the onset of over-indebtedness. Delaying an application for bankruptcy is a criminal offence. In many cases, insolvency proceedings result in the company being dissolved.