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Kanzlei Verbracken & Partner
Debt settlement: assessing an agreement with creditors
Debt settlement can offer an alternative to insolvency. It sets out how claims are resolved through a lump sum, instalments or other arrangements. A fundable plan, clear terms and the necessary agreement are essential.
What makes an offer sustainable?
Start with what you can reliably afford, not a desired write-off percentage. Allow for rent, living costs and current commitments. Family funding must genuinely be available and should not create unclear new liability. An instalment affordable for only a few months may postpone rather than resolve the problem.
Account for all claims and security
Principal, interest and costs should be traceable. Disputed claims and security need review too. Settling with one bank does not automatically resolve other creditors or claims against co-debtors. Specify whether the remaining balance is released and what happens if a payment is late.
Agreement cannot be assumed
An out-of-court settlement binds its parties under the agreed terms. Silence should not simply be treated as consent. A court debt-adjustment plan or insolvency plan follows separate rules. Preparation should therefore consider refusals, missing responses and newly identified claims as well.
Settlement or insolvency?
Compare the total burden, time and consequences of failure. Insolvency may be more appropriate where funding or agreement is unavailable. An out-of-court attempt is normally part of preparing German consumer insolvency. No particular debt amount guarantees a settlement or makes it economical.
How assessment starts
Prepare a complete creditor list, claim statements and a realistic budget. Separate available lump sums from monthly surplus. We assess high liabilities and possible routes, involving the appropriate professionals for legal review and negotiation. Scope and fees are clarified before engagement.
Sources and legal foundations
Sources checked: 14 September 2026
Your situation deserves a clear next step.
We assess your circumstances personally and involve the appropriate professionals for legal and tax questions.