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Creditors’ rights in insolvency proceedings

Filing of claims, security, the creditors’ committee, rights of exclusion and separation, and influence over the insolvency plan.

20 July 2026 | Reading time 7 min. | Author: Johannes Egelhof LL.M.

The rights of a creditor in insolvency proceedings depend on the legal nature of their position. The first step, therefore, is to classify all claims and security interests rather than simply filing a claim for the full amount owed. Once proceedings have commenced, insolvency claims can no longer generally be enforced individually. Instead, procedural rights apply, such as filing claims in accordance with Section 174 of the Insolvency Code (InsO), participating in creditors' meetings, and voting on the insolvency plan. The rights of separation under section 47 of the Insolvency Code relate to assets outside the insolvency estate. Rights of set-off allow for preferential satisfaction from the proceeds of such assets. Significant legal acts, such as the sale of the business, require the consent of either the creditors’ committee or the creditors’ meeting, in accordance with section 160 of the Insolvency Code.

What types of claims are there?

Insolvency claims are financial claims that were already valid at the time proceedings were opened. They are lodged with the insolvency register and form part of the distribution. These typically include outstanding invoices, loan claims, claims for damages and certain future or conditional claims.

By contrast, estate liabilities arise as a result of the proceedings or through the actions of the insolvency administrator or the debtor acting as its own administrator. In principle, these must be settled first from the estate. It may therefore be significant whether a payment was made before or after the opening of proceedings and who initiated it.

Subordinated claims under section 39 of the Insolvency Code (InsO) are only settled once the other insolvency creditors have been fully satisfied. These may include certain interest payments, fines or shareholder loans. As a rule, they are only filed if the court specifically requests this.

How is a claim lodged with the insolvency register?

Pursuant to section 174 of the Insolvency Code (InsO), the claim must be lodged with the insolvency administrator or, in the case of self-administration, with the administrator. It must clearly state the amount and the basis of the claim. Supporting documents should be attached. A mere list of invoices without a clear legal basis may lead to queries or the claim being contested.

Apart from the principal claim, interest is only to be calculated as an insolvency claim up to the day before the commencement of proceedings. Costs and ancillary claims must be shown separately. In the case of claims for which a title has been issued, the title should be attached. Additional disclosure requirements apply to claims arising from a tort committed with intent.

The filing deadline set out in the order opening the proceedings should be observed. Late filing is generally possible, but may trigger a special examination date and incur additional costs. Above all, the filing must not be confused with the limitation period check.

What happens on the hearing date?

The insolvency administrator and the insolvency creditors may contest claims that have been lodged. If a claim is contested neither by the administrator nor by a creditor, it is deemed to have been established in accordance with section 178 of the Insolvency Code (InsO). Inclusion in the table generally has the same effect as a final judgement vis-à-vis the insolvency administrator and the insolvency creditors.

If only the debtor disputes the claim, the claim generally remains confirmed for the purposes of distribution. However, the dispute may be relevant for subsequent enforcement against the debtor once the proceedings have concluded. If the insolvency administrator or another creditor disputes the claim, the claimant must seek a declaration of the claim.

In the case of claims without an enforceable title, the creditor brings an action for a declaratory judgement. If an enforceable title or final judgement already exists, it is generally incumbent upon the disputing party to pursue the objection. The specific legal position should be clarified immediately following the outcome of the verification process.

What are rights of separation?

A party entitled to claim exclusion asserts that an item does not form part of the insolvency estate. Section 47 of the Insolvency Code (InsO) refers in this regard to the rules on ownership and restitution applicable outside insolvency proceedings. Typical cases include property belonging to a third party, leased assets, goods held on consignment or property subject to a valid retention of title.

The claim is not lodged as an ordinary insolvency claim. It must be specifically asserted against the insolvency administrator. The asset must be identifiable. In the case of goods that have been processed, mixed or resold, the legal position may have changed.

If the item is required for the continuation of business operations, negotiations often take place regarding temporary continued use or a purchase. In such cases, the owner should take care not to unwittingly relinquish their rights and should clearly stipulate the usage fee, insurance and return of the item.

What are rights of separation?

Rights of separation entitle a creditor to preferential satisfaction from the proceeds of an asset forming part of the insolvency estate. These include, in particular, mortgages, title retention, assignments for security and certain liens. The asset remains part of the insolvency estate but is, in economic terms, encumbered in favour of the security holder.

In the case of movable property and claims, the insolvency administrator may, in accordance with section 166 of the Insolvency Code (InsO), realise the assets themselves, subject to the statutory conditions. The proceeds are distributed to the creditor entitled to separation after deduction of statutory costs of assessment and realisation. Any unsecured balance is filed as an insolvency claim.

Security interests should not merely be asserted, but fully documented. The security agreement, proof of ownership, the ability to identify the assets covered, priority and the date on which the security takes effect are crucial. Conflicts may arise in the case of blanket assignments and extended retention of title.

What is the significance of retention of title?

A simple retention of title may confer a right of separation in respect of goods that are still in existence and identifiable. If the debtor has further processed, combined or sold the goods, the position is determined by the agreed extension or prolongation of the retention of title and the statutory rules governing rights in rem.

Suppliers should quickly identify outstanding stock. Item numbers, delivery notes, storage locations and stock lists facilitate identification. A general reference to the standard terms and conditions is not sufficient if the inclusion, scope or chain of title are in dispute.

A separate agreement should be reached for new deliveries following the filing for insolvency. The previous security arrangement does not necessarily apply unchanged to transactions involving the insolvency estate or deliveries to a provisional insolvency administrator.

Do set-off rights remain in force?

A set-off situation existing at the time of the opening of proceedings generally remains in force under section 94 of the Insolvency Code (InsO). Sections 95 and 96 of the Insolvency Code (InsO) set out when subsequent set-off is still possible or precluded. In particular, it may be inadmissible if the creditor acquired the counterclaim only after the commencement of proceedings or created the set-off situation in a manner that is subject to challenge.

The assessment requires a precise chronological analysis. The origin of the claim, its due date, any conditions attached to it and the acquisition of the counterclaim must be considered separately. Group set-offs or contractual netting are not automatically protected from insolvency proceedings simply because they appear economically sensible.

Creditors should declare and document set-off positions at an early stage. Filing a claim without taking set-off into account may result in unclear or inflated amounts.

What powers does the creditors’ meeting have?

Under section 74 of the Insolvency Act (InsO), all creditors entitled to separate satisfaction, insolvency creditors, members of the creditors’ committee, the insolvency administrator and the debtor are entitled to attend the creditors’ meeting. The meeting decides on key issues relating to the proceedings.

It may appoint a different insolvency administrator, decide on the continuation of the proceedings and approve particularly significant realisation measures if there is no creditors’ committee. It also votes on an insolvency plan.

Voting weight is generally determined by the amount of the claim. In the case of disputed claims, voting rights may be determined separately. Anyone wishing to exert influence must therefore clarify their claim and representation before the meeting.

What is the role of the creditors’ committee?

The creditors’ committee supervises and supports the insolvency administrator or trustee. It scrutinises financial transactions, accounts and significant measures. Legal acts of particular importance, such as the sale of the company, major settlements or far-reaching financing arrangements, generally require its approval.

Various groups should be represented on the committee. These include creditors with a right to separate satisfaction, major insolvency creditors, small creditors and employees. Members do not act merely as representatives of their own companies, but in the interests of the creditors as a whole.

Membership provides considerable access to information and influence, but also entails responsibility and liability risks. Committee members must independently review decisions, disclose conflicts of interest and protect confidential information.

How can creditors influence the sale of a business?

The sale of a company is often the most important decision regarding the realisation of assets. Under section 160 of the Insolvency Code (InsO), the insolvency administrator must obtain the consent of the creditors’ committee or the creditors’ meeting for particularly significant legal acts. Additional rules apply to sales to parties with a particular interest and to potential sales below market value.

Creditors may request information on the purchase price, going-concern costs, the distribution of security and alternative options. However, their consent is not an opportunity to focus solely on optimising their own individual position. The guiding principle remains the economic interests of the creditors as a whole.

Secured creditors have additional influence where their encumbered assets are affected. Early consultation can speed up the sale and increase the proceeds from the realisation of assets.

What rights do parties have under an insolvency plan?

The insolvency plan divides those affected into groups. Creditors can check whether their group has been formed correctly, whether the settlement calculation is accurate and how their rights will be affected. They vote on the plan at the discussion and voting hearing.

A plan must not arbitrarily disadvantage minority groups. The court examines statutory safeguards. Under certain conditions, a group that opposes the plan may be outvoted if the plan does not place them in a worse position than they would be in without the plan and if they receive an appropriate share.

It is crucial for creditors to assess the alternative realistically. A lower nominal dividend may be economically preferable if it is paid early and contributes to a viable going concern. Conversely, an optimistic going concern projection must not be accepted without scrutiny.

What information can creditors request?

At the reporting hearing, the insolvency administrator reports on the financial situation, the causes of the insolvency and the options for realising assets. The creditors’ committee and the creditors’ meeting receive further information relating to the proceedings. However, an individual creditor does not have an unlimited right to access all internal documents.

Rights to information must be balanced against confidentiality, data protection, trade secrets and the orderly conduct of proceedings. In the case of security interests or disputed claims, a specific right to information may exist if the creditor is otherwise unable to assess their rights.

A precise enquiry is most effective in practice. Those who explain the link between the information required and their own legal position are more likely to receive a reliable response than those making blanket requests for access to the data room.

About the author

Johannes Egelhof LL.M.

Partner · M&A & Company Law

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Johannes Egelhof, LL.M., advises creditors, security holders and committee members in corporate insolvency proceedings. He assists with the filing of claims, the assessment of security, decisions on the realisation of assets and negotiations on insolvency plans.

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Maxfeld.legal classifies claims and security, represents creditors at examination hearings and on committees, and oversees the realisation of assets and the implementation of the insolvency plan.

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Frequently asked questions about creditors’ rights in insolvency proceedings

Where should a claim be lodged in insolvency proceedings?

The claim must be lodged with the insolvency administrator or, in the case of self-administration, with the administrator. The amount, the basis of the claim and supporting documents must be clearly stated.

What happens if a claim is lodged late?

It is generally possible to lodge a claim at a later date, but this may result in a subsequent review and additional costs. The claim should therefore be lodged within the time limit specified in the order opening the proceedings.

What is the difference between ‘Aussonderung’ and ‘Absonderung’?

In the case of exclusion, the asset does not form part of the estate and is claimed back. In the case of separation, it does form part of the estate, but the secured creditor is given priority in being satisfied from the proceeds of realisation.

Can a creditor still set off a claim?

A set-off situation existing at the time of the commencement of proceedings is often maintained. However, the Insolvency Code contains exceptions, in particular for set-off situations created retrospectively or which are subject to avoidance.

Who is entitled to attend the creditors’ meeting?

In particular, those entitled to participate include insolvency creditors, creditors entitled to separate satisfaction, the debtor, the insolvency administrator and the members of the creditors’ committee.

Is it worth serving on the creditors’ committee?

It enables early access to information and the ability to influence key decisions. However, committee members have supervisory duties, must act in the best interests of all creditors, and may be held liable in the event of a breach of duty.

Can a creditor block an insolvency plan?

He may vote against the proposal within his group. A group that opposes the proposal may be outvoted, subject to the statutory requirements, provided that the rights of the minority are safeguarded and there is adequate participation.

Creditors’ rights in insolvency proceedings

What types of claims are there?

How is a claim lodged with the insolvency register?

What happens on the hearing date?

What are rights of separation?

What are rights of separation?

What is the significance of retention of title?

Do set-off rights remain in force?

What powers does the creditors’ meeting have?

What is the role of the creditors’ committee?

How can creditors influence the sale of a business?

What rights do parties have under an insolvency plan?

What information can creditors request?

About the author

Should a claim or security be secured in insolvency proceedings?

Frequently asked questions about creditors’ rights in insolvency proceedings

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