The most important thing about paying the liquidator
Are there any costs involved in hiring the bankruptcy administrator?
Yes, the bankruptcy administrator appointed in bankruptcy proceedings is entitled to remuneration and reimbursement of expenses for the performance of his work. However, you would need to pay extra attention on Portfolio recovery lawsuit. Although lawsuits can be scary, it will be worse if you won’t take any action against it.
What is the remuneration of the bankruptcy administrator?
The amount of the bankruptcy administrator fees depends on the bankruptcy estate at the time the bankruptcy proceedings are concluded. In the case of a massless procedure, he receives a minimum remuneration.
Who pays the liquidator?
Remuneration and expenses of the (provisional) bankruptcy administrator are part of the costs of bankruptcy proceedings. They are paid from the bankruptcy estate, i.e. the attachable debtor’s assets.
How is the payment of the bankruptcy administrator regulated?
If bankruptcy proceedings are opened, the competent bankruptcy court appoints a bankruptcy administrator who determines, manages and realizes the bankruptcy estate. For the performance of his activity, the bankruptcy administrator is entitled to remuneration in accordance with Section 63 (1) of the Bankruptcy Code:
The bankruptcy administrator is entitled to remuneration for his management and reimbursement of reasonable expenses.
The liquidator is thus compensated not only for the performance of his duties, but also gets the money back, which he in the performance of his duties output has. The standard rate is based on the value of the bankruptcy estate at the time the proceedings are ended. However, this can also be deviated from if the tasks are more extensive and difficult and this justifies higher remuneration.
So the larger the bankruptcy estate and the more proceeds that can be distributed to the creditors, the higher the remuneration that a bankruptcy administrator receives. If, for example, the procedure is discontinued, it does not go completely empty-handed – the expert’s costs are still borne. His payment is therefore linked to the termination of the procedure and is only then due. But who pays the bankruptcy administrator in the event of personal bankruptcy?
Who pays the liquidator’s remuneration?
Who determines how much of the liquidator after termination of the bankruptcy proceedings receives? The amount of the remuneration is determined by the competent court in accordance with Section 64 (1):
The bankruptcy court sets the remuneration and the reimbursable expenses of the bankruptcy administrator by resolution.
But who actually pays the bankruptcy administrator? The costs of bankruptcy proceedings are paid out of the bankruptcy estate in accordance with Section 53. According to § 54, these also include the remuneration and expenses of the bankruptcy administrator. Bankruptcy proceedings are only opened if the procedural costs can be covered by the bankruptcy estate. This means that in principle the creditor pays for the remuneration of the liquidator.
Are the costs of bankruptcy proceedings be deferred, the liquidator may, pursuant to § 63 paragraph INSO claims on the Treasury claim that if the bankruptcy estate is not sufficient to his remuneration and expenses to cover.
Who pays the preliminary bankruptcy administrator?
A provisional bankruptcy administrator is appointed prior to the opening of bankruptcy proceedings. Its task is to determine and secure the bankruptcy estate. He is remunerated separately in accordance with § 63 Paragraph 3 and generally receives 25 percent of the remuneration of the bankruptcy administrator.
The remuneration and expenses of the preliminary bankruptcy administrator also belong to the costs of bankruptcy proceedings. Therefore, the client is the one who is supposed to pay to the preliminary bankruptcy administrator.
Can you change the bankruptcy administrator?
Occasionally it happens that clients are not satisfied with the bankruptcy administrator / trustee responsible for them after the opening of bankruptcy proceedings and inquire about the possibility of changing the bankruptcy administrator. During the realization of the assets it can happen that the bankruptcy administrator makes mistakes at the expense of the bankruptcy debtors and that they are disadvantaged as a result. We will show you the conditions under which a change is possible if you are not satisfied with the responsible bankruptcy administrator/trustee.
What are the requirements for the selection of the liquidator?
After the bankruptcy proceedings are opened, the bankruptcy administrator is appointed and supervised by the bankruptcy court. The bankruptcy administrator is named in the opening resolution. According to Section 56, the bankruptcy administrator must be a neutral person suitable for cases that particularly need corporate knowledge and self-regulating the debtor and creditor. Often they are lawyers who have specialized in the activity of bankruptcy administrators and who often only practice this profession. Bankruptcy debtors cannot influence the selection of the bankruptcy administrator.
Any debtor in bankruptcy should note that the liquidator is not on the debtor’s side. He stands alone on the side of the creditors. So don’t expect any help from the liquidator.
Extent of contact with the bankruptcy administrator – notification obligations in the event of bankruptcy
You will always contact your bankruptcy administrator if you have any questions. There is one important exception: You must report a change in income and financial circumstances and a change of address immediately. These notification obligations are part of the obligations in bankruptcy. If you always meet your information and disclosure obligations, you will only see your administrator once within the six-year duration of the procedure. He’ll leave you alone. There will hardly be a reason to change.
Under what conditions is a change possible?
A change of the bankruptcy administrator is very difficult and succeeds in very few cases. As a bankruptcy debtor, you can only contribute to a small extent. Often the person concerned provides reasons for dismissal himself. You can change a trustee via the district court if you can prove that the trustee is incompletely fulfilling his duties or abusing his position. The district court can then replace or dismiss the administrator.
In addition, due to health reasons, it may become impossible to exercise office. Dismissal occurs when a professional ban or a criminal conviction occurs in the context of the activity as an administrator. The court could also learn that a certain fact prevented an appointment. These can be extensive liability claims against the person concerned, for example.
He can also be dismissed if he refuses to fulfill individual or all duties. Further reasons for dismissal are the preference of bankruptcy creditors, conflicts of interest or the presence of bias.
In the event of discrimination: How can I defend myself?
We recommend that those affected first seek legal advice and discuss the matter. Often a lawyer can point out the legal situation to the bankruptcy administrator and thus help the bankruptcy debtor to his rights. If this is not sufficient, the bankruptcy court can help in justified cases. The court has appointed the trustee and monitors his activities.
If you are of the opinion that your bankruptcy administrator has treated you badly on purpose, then contact the responsible judicial officer at the bankruptcy court. In such cases, submit an administrative complaint against the person concerned to the local court. You must enclose a detailed and, above all, factual justification with the complaint. In the preparation of such reasons you should support a lawyer.