People who are heavily in debt have been able to register for personal bankruptcy for a number of years and then apply for exemption from residual debt after a behavioral phase of six years. The prerequisite for this, however, is that they do not incur any new debts during the behavioral phase and that they also properly meet their other financial obligations. This also includes trying to find a job that not only ensures your livelihood but also earns such a high income that as many creditors as possible can be satisfied with the help of your current income.
Credit despite debt relief
In principle, the debtor is not creditworthy during the good behavior phase. This applies even if he has a very high income. However, this income is of little use to him, since any amount that is above the garnishment-free limit is automatically passed on to the insolvency administrator, who then distributes the money to the individual creditors according to his specifications. The garnishment of the income is only ended when the behavioral phase has also been successfully completed. Thereafter, the residual debt relief is usually granted. However, this does not mean that full creditworthiness is restored. Before this happens, you have to wait another three years. This is how long the debt relief is noted in the Credit Bureau information. Only then will it be permanently deleted.
The German banks and savings banks generally give a negative assessment of the fact that they are exempt from residual debt. This is mainly due to the fact that the exemption from residual debt is a clear indication that the debtor has not been able to fully service its creditors in the past and that their claims have remained at least partially unsatisfied. The banks cannot approve a loan despite the fact that they are exempt because they have to assume that the debtor will not change their behavior even after the exemption from the debt has been granted and that the creditors will then go away empty-handed. Even if this will not always be the case, the bank does not want to take any risks and rejects the loan despite the debt relief. Then there is no other option than to wait until the Credit Bureau entry is deleted and full creditworthiness is restored.
As an alternative to a conventional bank loan, a loan without Credit Bureau could be considered. If the relevant conditions are met, this is also possible as a loan despite the fact that the debt is released. To do this, it is imperative that the applicant is an employee and is in a permanent position. His employer must also not be a temporary agency or temporary employment agency. Even a loan without Credit Bureau must be properly repaid. Therefore, every potential borrower should ask whether there really is no other way than to get into debt again shortly after the debt relief. In case of doubt, the loan should then preferably be waived in spite of the exemption from residual debt.