There are two different factors at play here. One is that until recently it was very difficult to form a limited liability company (GmbH) in Germany, requiring

There are two different factors at play here. One is that until recently it was very difficult to form a limited liability company (GmbH) in Germany, requiring a fair amount of founding capital (currently €25,000). In 2008, the "UG (haftungsbeschränkt)" was created as a new type of limited liability company; it only requires €1 of founding capital, but also to set aside one quarter (I think) of your profits to add to the capital until you reach €25,000. This option was not available back then, and it appears as though Mr. Huber became fully liable for his business's accumulated debts (which must have been considerable to wipe out both his retirement savings and result in the loss of his family home). The second problem is that until 1999, there was no viable way to deal with a personal bankruptcy. Basically, once bankrupt, it was nearly impossible to get out of it without your creditors' consent. The personal bankruptcy reform of 1999 changed that – though the process is still pretty onerous – but probably too late for Mr. Huber to recover in any meaningful way.