Bankruptcy is not a temporary financial squeeze but the fact that the debtor, whether a private individual or a businessperson, can no longer meet their payment obligations. Outstanding bills, services and other monthly expenses can no longer be covered by income or business revenue. Bankruptcy means complete ruin and being insolvent. Anyone who knowingly brought about or caused this situation is committing a criminal offense. If you want to prevent that, you should file for financial bankruptcy in time.

File for bankruptcy, otherwise a heavy penalty looms


The penalty for bankruptcy can mean up to 5 years in prison or, in the best case, only a fine. Filing for bankruptcy to prevent worse is certainly not a luxury, and ultimately it reduces the penalty considerably.

The following circumstances are punishable:

  1. Anyone who sells off assets that belong to the insolvency estate and moves them to their own side, or damages or destroys them.
  2. Anyone who invests inappropriate and excessive sums of money uneconomically in betting or in unpromising and senseless spending that bears no healthy relation to their means.
  3. Goods already produced that were financed through credit are sold far below their value.
  4. Claims that the rights to the insolvency estate belong to others, or invents any such rights.
  5. Anyone who fails to keep proper books or manipulates them for their own benefit, so that assets and losses cannot be clearly told apart.
  6. Conceals their financial position by destroying accounting records early, so that it can only be determined with difficulty or is made impossible.
  7. Doctors balance sheets to look better or doesn't prepare them at all by the agreed deadline.
  8. Reduces the state of their assets through gross negligence or tries to hide it.
  9. Under the law, bankruptcy is always an insolvency offense, punished considerably depending on the severity of the bankruptcy.

What, when and how when filing for bankruptcy

Exactly when to file always depends on how serious the company's situation is. A constellation that always means a serious financial situation. Provided expenses exceed income, it's time to file for bankruptcy.
As soon as insolvency can no longer be remedied by your own efforts, it's advisable to seek advice from a debt counseling service so that you can file for bankruptcy early.
Those affected often don't realistically admit to themselves how serious their situation is, but the neutral expert doesn't mince words and shows exactly how, in the best case, the insolvency might be remedied or which steps now have to be taken to set the filing in motion properly.

The milder punishment
Fines or shorter prison sentences also exist for those who don't know their financial situation or plight, or who only brought it about carelessly. The severity of the punishment is in the hands of the court and its assessment of the cause and gravity.