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Coronavirus and Its Consequences – Bankruptcy – Personal Catastrophe?

Act in time!

The economic impact of the coronavirus is omnipresent. Politicians promise help for small and medium-sized tax companies by making it easier for them to get a bank loan, among other things.

In our opinion, these measures fall short and ignore reality. Suppose your company was already in minor financial difficulties before the crisis was announced and you were hoping for the spring business, which will usually help your company recover. This spring business is now breaking away completely from you. You have employees who are in quarantine or who are ill and in case of doubt, your entire company is shut down. Nevertheless, as an employer, you are initially liable for the continued payment of your wages. Your employees ask you to pay the net wage, otherwise they will not be able to pay their rent. You can be persuaded to do this and transfer the net wages, but it is no longer enough to transfer the wage tax and social security contributions on the net wage. You go to the bank and apply for a short-term overdraft, the processing of which takes time and is ultimately rejected due to a lack of personal security. Even if you were to get this bank loan, the bank generally requires you to provide personal security or you are personally liable for its repayment.

If, contrary to expectations, your company does not recover from this corona crisis as hoped and the insolvency cannot be eliminated, you are forced to file for bankruptcy, be it in your own name or as a managing director for your company.

Payments & Dues after Bankruptcy

In both cases, you are personally liable for non-payment of social security contributions, at least as far as the payment of employee contributions is concerned. Some of the laws and instances may impact your personal relations with your spouse too if the business or assets are under partnership contract. The law does not differentiate here whether you were prevented from paying the contributions for health or other reasons. The social insurance companies report their claims to the insolvency table with the note “from tortious act”. As a result, these claims are not included in the discharge of residual debt. Even in the insolvency of the GmbH you are personally liable for the payment of these contributions and if you have not paid them, you face criminal proceedings. The same applies to wage tax, for which you are also personally liable in the bankruptcy of the company.

Tax and Social Security Contributions

The tax offices and the social security funds are rigorous in these cases. If the company does not have enough liquidity to pay the net wages and the wage tax owed as well as the social security contributions, the employer is obliged to reduce the net wages according to its available liquidity.

In our many years of practice we have repeatedly experienced cases in which the judge was visibly unconvinced and affirmed the defendant’s liability or, in civil proceedings, the defendant, even if this did not correspond to his personal convictions. The judge simply pointed out that he cannot ignore the applicable laws and regulations and that he must observe them.

In our opinion, this is the problem that is not recognized by current politics. If you succeed in restoring your solvency after the end of the Corona crisis and paying the taxes and social security contributions owed, the matter is settled for you under criminal and civil law. However, if your company does not recover, you are fully personally liable under the current legal situation.

How to ensure paying taxes as a liability

Attorney Debt Fighters would recommend that you personally contact the tax office and social security and ask in writing for a deferral of social security contributions and wage tax as well as sales tax. In this case, you could at least limit your personal liability in a later bankruptcy, as there was no criminal offense. If the deferral is refused, you have to decide for yourself whether you accept the risk of later insolvency, possibly with personal liability, or, alternatively, the opening of insolvency proceedings, possibly with self-administration and the aim of restructuring your company in an open insolvency proceeding Want to give preference.

Loans Agreements for the Future

You wanted to finance your own home, then were encouraged by the resourceful employees of a bank to conclude building society loan agreements and now you cannot fulfill these agreements? Your bank may not have adequately checked your creditworthiness! This is not your fault! Defend yourself against unlawful claims from your bank with the help of an experienced legal advisor!

Nowadays, the dream of owning a home can also be fulfilled with little equity. Of course, a clever financing option must be found for this. Financial experts from a wide variety of banks offer a wide range of options. In many cases, home savings loans are granted here. In order to be able to pay off your own four walls in addition to the daily needs, your financing bank must calculate exactly whether and what type of financing you can afford. This process is called creditworthiness check, is regulated in §§ 505 a ff. Civil Code and has significant legal consequences for your bank in the event of a breach.

Because if the bank, as the lender, violates its obligation to carry out a proper credit check under Section 505a of the Civil Code, the agreed fixed as well as the agreed variable borrowing rate automatically change to the standard market interest rate.

Our qualified team is at your side!

Our team consists of bankruptcy attorneys specializing in insolvency law and banking and capital market law, auditors and tax advisors. We can look back on over 30 years of experience, especially in commercial law. We cooperate with competent lawyers who support us in every situation and especially with more extensive proceedings. The new technologies also enable us to support you extensively from a distance, so that we can work for you not only regionally, but also nationwide.

Do not hesitate to contact Right Lawyers through our official website. The first assessment on our part is free of charge for you.

Every crisis is followed by an upswing. Position yourself in good time so that you can take advantage of this boom!

 

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