An owner has started the sale of his house. While prospective buyers request documents, insolvency proceedings become relevant. He wants to continue to complete the sale himself and pay his most urgent bills from the proceeds. In the fictional German case the authority must first be clarified. A registered name and a sales file kept to date do not answer this question alone.
The presentation concerns proceedings with an insolvency administrator; self-administration and special procedural forms are not explained here. It does not offer a restructuring strategy, but a limited legal starting point and our editorial organisational recommendation before further sales commitments.
First determine the procedural stage
Payment difficulties, a filed insolvency application, provisional measures and the opening of proceedings are different stages. A participant should therefore not merely note “it’s already underway”. The actual court decision with its current scope is required.
Before opening, the court may under § 21 InsO, among other things, appoint a provisional administrator and order a general prohibition on dispositions or a requirement of consent. § 22 distinguishes the position of the provisional administrator depending on these prerequisites or his judicial mandate. [VORLAEUFIG, ROLLE]
From the mere word “provisional” it therefore follows neither unrestricted personal freedom to sell nor automatically the same role as after opening. The specific order is professionally assessed before any further binding declaration.
After opening separate ownership and right of disposition
§ 35 paragraph 1 InsO describes the basic scope of assets of the insolvency estate. Whether the specific house or a particular share belongs to it must be clarified on a case-by-case basis. [MASSE]
For estate assets, § 80 paragraph 1 provides that with the opening of proceedings the administration and right of disposition pass to the insolvency administrator. [VERFUEGUNG] The debtor should therefore not continue a private sales process as if nothing had changed in the roles of the parties involved.
§ 81 deems the debtor’s own dispositions over estate items void in principle after opening, but contains statutory differentiations and exceptions. [FOLGE] This article does not assess an already signed contract or a good-faith question. In an already advanced process the immediate concrete review is more important than a blanket assessment from a general text.
Hand over the previous sales status as a factual record
In the case the owner has already commissioned an agent, allowed viewings and communicated price expectations. He compiles these events with dates and actual content. A declared interest, a binding contract and an execution already set in motion are not treated as the same stage.
The responsible case management and contract preparation can then clarify which tasks may continue and who should make which declaration. This article does not claim that every previous instruction automatically terminates or simply continues unchanged.
For further contacts a coordinated information channel is specified. Prospective buyers are not given a premature guaranteed completion date if the required roles or prerequisites are still open. At the same time private details about debts and family circumstances do not belong in a public listing without verification.
Banks and other owners remain separate parties
A financing bank, a co-owner and the insolvency administrator do not automatically have the same function. Consent to a particular part of the process does not replace the review of the remaining prerequisites. One cannot read the entire current payment and distribution situation from an existing mortgage alone.
Our organisational recommendation is a manageable overview of roles: which body assesses which point, on what actual basis and for which next step? A contact person can collect the documents without thereby being authorised to make every decision.
Do not provisionally allocate the proceeds privately
In the example the owner does not prepare a private payout plan solely from the hoped-for purchase price. Which payments, securities and procedural issues must be observed is clarified with the responsible case management. An apparently good sale price externally does not yet indicate which amount would be available for one’s own further expenses.
The sensible next step is therefore a fully described handover of the previous sales status. Only afterwards do authorised further negotiations and the appropriate contract processing follow. This prevents an already difficult financial framework from becoming even more confusing through additional unresolved commitments.