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ARTICLE · 20 AUGUST 2026

Incongruent Coverage (Section 131 Inso) – When Payments Made Under Pressure Backfire

Mayer Brown
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German insolvency law's principle of equal creditor treatment faces a critical challenge through Section 131 of the Insolvency Code, which addresses "incongruent coverage" - situations where creditors receive security or satisfaction they weren't entitled to receive, or not in that form or timing. The practical stakes are substantial: within the last month before insolvency filing, objective incongruence alone suffices for avoidance actions, with no requirement to prove the creditor's knowledge of the debto

GermanyInsolvency/Bankruptcy/Re-Structuring
Marco Wilhelm
Marco Wilhelm
Malte Richter
Malte Richter
Tina Hoffmann
Tina Hoffmann
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I. WHY THIS TOPIC IS IMPORTANT

The fundamental principle of German insolvency law is the equal treatment of creditors. The insolvency avoidance rules are designed to reverse transfers of assets made prior to the opening of insolvency proceedings that disadvantage creditors, thereby increasing the insolvency estate. Section 131 of the German Insolvency Code (Insolvenzordnung, InsO) addresses so-called “incongruent coverage” (inkongruente Deckung): The insolvency administrator may avoid the granting of security or satisfaction to a creditor that was not entitled to receive it, or was not entitled to receive it in that form or at that time.

The practical implications are significant: In the case of an avoidance action under Section 131 InsO, objective incongruence within the last month prior to the filing of the insolvency petition (or thereafter) is sufficient—no subjective requirements (the creditor’s knowledge of the debtor’s insolvency) are necessary. This considerably increases

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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