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> a customer (UK Ltd) who declared bankruptcy owing us a money and then then next day founded a new Ltd company and tried to act like he didn't owe us the money

> a customer (UK Ltd) who declared bankruptcy owing us a money and then then next day founded a new Ltd company and tried to act like he didn't owe us the money because it was a new entity. That is... how bankruptcy works? He literally didn't owe you money anymore. Obviously you shouldn't extend his new company credit, but extinguishing old debts is the exact purpose of bankruptcy.

theshrike79 3y ago
I think the idea here is that you can't just "declare bankruptcy" in Germany, it's a Process with checks and balances.
- denotational 3y ago
  It’s a process in the UK too, abuse of which could lead to the courts imposing sanctions ranging from barring the directors from company directorship all the way to piercing the corporate veil and holding directors liable for the company’s debts. Corporate insolvency requires an “insolvency practitioner” to be appointed by the directors; this is a regulated profession, and this ensures that the company is wound up according to the regulations and statutes. You cannot just “declare bankruptcy” in the UK either.
- redrove 3y ago
  Your comment is a bit tongue in cheek: it’s a process with checks and balances everywhere in the developed world, and scams aren’t common at all. You’re insinuating that due to the bureaucracy Germany is somehow better at this; it is not, it’s just more inefficient.
- throw__away7391 3y ago
  The US concept of bankruptcy is basically unimaginable in most (all?) of Europe. There's an old movie, The Edukators, where one of the protagonist is effectively broke and working a low wage job but has spent years already and has many years more left to pay off a debt she incurred by accidentally crashing into an expensive car without insurance. This situation is basically impossible in the US where the term "uncollectible" is used to describe such debts.
  - Valodim 3y ago
    I don't know about other countries, but in Germany there is Privatinsolvenz which is a personal bankruptcy that would resolve this exact scenario. Of course it would first be covered by mandatory insurance you have to have when driving a car (if you're not legally allowed to drive a car, well, you're on your own)
    - hnbad 3y ago
      FWIW Privatinsolvenz is not instant although the duration was shortened from the very excessive 7 years down to a more reasonable 3 years. During insolvency you're also prohibited from founding/owning companies or freelancing, though.
  - theshrike79 3y ago
    But on the flip side, Breaking Bad would've never happened anywhere in Europe - because "crippling medical debt" just is not a thing =)
imtringued 3y ago
Bankruptcy in Germany requires you to attempt to pay off your debts within six years. Any remaining debt gets canceled after those six years pass. This is... not how bankruptcy works in Germany. For a GmbH and other limited liability companiee there are minimum equity requirements instead.
- hnbad 3y ago
  The duration for private bankruptcy was recently cut to 3 years so it's a bit faster now at least. For corporations there's an entire process but in simple terms the company is handed over to an externally appointed handler who tries to generate liquidity by selling off all assets and contacting all debtors and creditors. The company might recover through the process (e.g. by finding an investor) but legally the corporation is frozen and substituted by a separate corporation that only exists to resolve its bankruptcy. If the corporation no longer has any assets, it can also be fast-tracked for being dissolved.

theshrike79 3y ago

I think the idea here is that you can't just "declare bankruptcy" in Germany, it's a Process with checks and balances.

denotational 3y ago
It’s a process in the UK too, abuse of which could lead to the courts imposing sanctions ranging from barring the directors from company directorship all the way to piercing the corporate veil and holding directors liable for the company’s debts. Corporate insolvency requires an “insolvency practitioner” to be appointed by the directors; this is a regulated profession, and this ensures that the company is wound up according to the regulations and statutes. You cannot just “declare bankruptcy” in the UK either.
redrove 3y ago
Your comment is a bit tongue in cheek: it’s a process with checks and balances everywhere in the developed world, and scams aren’t common at all. You’re insinuating that due to the bureaucracy Germany is somehow better at this; it is not, it’s just more inefficient.
throw__away7391 3y ago
The US concept of bankruptcy is basically unimaginable in most (all?) of Europe. There's an old movie, The Edukators, where one of the protagonist is effectively broke and working a low wage job but has spent years already and has many years more left to pay off a debt she incurred by accidentally crashing into an expensive car without insurance. This situation is basically impossible in the US where the term "uncollectible" is used to describe such debts.
- Valodim 3y ago
  I don't know about other countries, but in Germany there is Privatinsolvenz which is a personal bankruptcy that would resolve this exact scenario. Of course it would first be covered by mandatory insurance you have to have when driving a car (if you're not legally allowed to drive a car, well, you're on your own)
  - hnbad 3y ago
    FWIW Privatinsolvenz is not instant although the duration was shortened from the very excessive 7 years down to a more reasonable 3 years. During insolvency you're also prohibited from founding/owning companies or freelancing, though.
- theshrike79 3y ago
  But on the flip side, Breaking Bad would've never happened anywhere in Europe - because "crippling medical debt" just is not a thing =)

imtringued 3y ago

Bankruptcy in Germany requires you to attempt to pay off your debts within six years. Any remaining debt gets canceled after those six years pass. This is... not how bankruptcy works in Germany. For a GmbH and other limited liability companiee there are minimum equity requirements instead.

hnbad 3y ago
The duration for private bankruptcy was recently cut to 3 years so it's a bit faster now at least. For corporations there's an entire process but in simple terms the company is handed over to an externally appointed handler who tries to generate liquidity by selling off all assets and contacting all debtors and creditors. The company might recover through the process (e.g. by finding an investor) but legally the corporation is frozen and substituted by a separate corporation that only exists to resolve its bankruptcy. If the corporation no longer has any assets, it can also be fast-tracked for being dissolved.