From basic account to enforcement: technical terms explained simply

All persons legally residing in the European Union have been entitled to a basic account since 18/06/2016. A basic account is an account that enables basic payment features such as cash deposits, cash withdrawals, wire transfers, direct debits, and card payments.

Counselling is also intended to enable those who cannot hire a lawyer for financial reasons to obtain legal advice. Counselling must be requested from the local district court. If the applicant fulfils the prerequisites, they will receive a counselling certificate, which will enable the lawyer commissioned at that time to settle accounts with the state treasury.

In consumer insolvency proceedings, the failure of the out-of-court settlement attempt must be certified by a suitable body or person. Suitable bodies are specialised debt counselling centres that are recognised by the respective federal state and work according to certain quality criteria. Suitable persons are lawyers, tax consultants and notaries.

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Debt collection refers to the commercial collection of third-party receivables or receivables assigned for collection. Debt collection agencies must register with the competent authority in accordance with the Legal Services Act. To do this, they must meet the registration requirements and must have undergone a registration process.

The insolvency court is a division of the district court as well as the enforcement or family court.

The insolvency administrator is appointed by the insolvency court. The administrator manages the seizable assets of the insolvency debtor during the insolvency proceedings, collects receivables and distributes the proceeds to the creditors at the end of the proceedings. The office of the insolvency administrator ends with the lifting of the insolvency proceedings. If the debtor has applied for discharge of residual debt, the insolvency court must appoint a trustee for the conduct of business phase after the proceedings have been terminated. As a rule, the former insolvency administrator is also appointed as trustee. In particular, the trustee's task is to collect the seizable income assigned to them by the end of the assignment period and to distribute the proceeds to the creditors.

The creditor accesses the debtor's account as part of the enforcement by obtaining a seizure and transfer order from the enforcement court and having it served on the credit institution.

The PfÜB is an order of the enforcement court (department of the local court) by which a claim of a creditor is compulsorily enforced (compulsory enforcement, e.g. seizure of earnings).