Major Changes In Personal Bankruptcy Law

On 28 June 2017 the Austrian Parliament passed the government's legislative proposal on insolvency law (Insolvenzrechtsänderungsesetz 2017). After lengthy negotiations, the government finally agreed to shorten personal insolvency proceedings to a maximum five years and to abolish the minimum insolvency quota of 10 % under certain conditions. The amendments will be applicable as of 1 November 2017.

Personal bankruptcy in Austria

Austrian insolvency law provides two different types of proceedings for insolvent individual debtors to reach a debt discharge. In a first instance, an insolvent debtor is obliged to offer its creditors a settlement plan (Zahlungsplan), which shall include a quota corresponding to the expected income situation in the next five years, payable within the following seven years. If the creditors decline such a settlement plan, the debtor may request that proceedings for income levy with subsequent debt discharge (Abschöpfungsverfahren) be