Austrian creditor insolvency petition: review the claim, inability to pay, sufficient assets, possible advance and withdrawal consequences.
BRANDAUER Rechtsanwälte
Insolvency law, Salzburg and throughout Austria
We review the procedural status, contracts, payment records and security, then explain which legal question needs to be addressed next.
A creditor petition to open insolvency proceedings is not an ordinary debt collection step. The applicant must establish a credible basis for both the claim and the debtor’s inability to pay. One unpaid invoice does not prove the second requirement.
Section 70 of the Austrian Insolvency Code requires two separate lines of review. The creditor’s own legal position must be documented with the contract, performance, invoice and payment status. Concrete facts must also support inability to pay under section 66.
Before filing, a creditor should also understand possible cost consequences, the procedural position and the effect of a later payment or withdrawal. This article organises the documents and decisions required but does not replace review of a specific petition.
The claim, inability to pay and funding of the proceedings serve different legal functions. Their supporting records should not be mixed into one undifferentiated chronology.
| Review field | Legal function | Important records | Core question |
|---|---|---|---|
| Claim | Section 70(1) requires a credible insolvency claim or a claim arising from equity replacing funding. | Contract, order, evidence of performance, invoice, account statement and correspondence. | Are the basis, amount and debtor allocation traceable? |
| Separate requirement Inability to pay | Section 66 concerns the debtor’s ability to meet due liabilities. | Returned payments, enforcement results, cessation of payments, reliable statements and other contemporaneous records. | Do several facts show a general payment crisis? |
| Procedural data | The debtor’s identity, jurisdiction and any existing proceedings must be clear. | Current register extract, service address, company register number and known court reference numbers. | Does every record concern the same legal entity? |
| Funding | Sections 71 and 71a concern assets sufficient for initial costs and a possible advance. | Information on realisable assets, receivables, avoidance claims and known enforcement results. | Are sufficient assets likely to be available? |
| Procedural objective | An insolvency petition must not be used merely to pressure the debtor into an individual payment. | Internal decision, claim strategy, settlement offers and records of previous steps. | Is the objective genuinely to open collective proceedings? |
This overview supports file preparation. The insolvency court assesses whether the statutory requirements have been made credible on the facts of the individual petition.
This check separates the claim, inability to pay and sufficient assets. It does not decide whether a petition is admissible or appropriate in an individual case.
Discuss the specific matter with the firm.
Section 70 requires the applicant’s claim to be made credible. Organise the legal basis, performance, invoice, part payments, credits and objections chronologically. An outstanding balance without a supporting chain of records is not a reliable basis for assessment.
A specific dispute must not be omitted. Preserve the objections and supporting material in full. Then assess whether the claim can be made credible in insolvency proceedings or whether another court route should be taken first.
Nonpayment of one claim can have several causes. Section 66 requires assessment of general ability to pay. Collect only concrete facts obtained lawfully and do not infer insolvency from rumours or a single dispute.
If assets sufficient for initial costs are unlikely, the court may order an advance under section 71a. If it is not paid in time, the petition is dismissed for lack of sufficient assets. The amount and deadline are set by the court order.
Section 71 requires assets sufficient for initial costs, but they need not be immediately or effortlessly realisable. Record known assets and claims together with their source. Do not present an estimate as a confirmed asset.
Once the claim, inability to pay and asset information are organised, the specific draft can be reviewed. Jurisdiction, debtor identity, evidence, possible costs and the genuine objective of collective proceedings must also be aligned.
Section 70(1) states two requirements for a creditor petition. The applicant must establish a credible insolvency claim or a claim arising from equity replacing funding and the debtor’s inability to pay. The wording expressly allows an insolvency claim that is not yet due.
For the claim track, identify the contracting parties, performance, creation, amount, due date, payments and objections separately. An invoice does not automatically prove that the invoiced performance was agreed and supplied. A serious dispute must not be concealed.
The broader article on creditor representation in Austrian insolvency proceedings also covers filing a claim and its status after proceedings open. The creditor petition discussed here comes first and initially seeks the opening of collective proceedings.
Section 66(1) makes inability to pay a requirement for opening proceedings. Subsection 2 provides that it is presumed in particular where the debtor has ceased payments. Creditors need not already be pressing for payment. Paying some creditors does not by itself establish that the debtor remains able to pay.
The statement that the debtor has not paid is therefore insufficient, as is a collection of unconfirmed market rumours. Concrete facts need a date and source. They may include unsuccessful collection steps, documented returned payments, enforcement results or clear statements about an inability to meet liabilities. Their legal weight depends on the overall picture.
Distinguish a temporary payment delay, a claim dispute and inability to pay. A debtor may dispute one invoice because of alleged defects while paying other due liabilities. Conversely, one payment after filing does not automatically resolve a broader payment crisis.
Section 70(2) provides for service of the petition on the debtor. The court hears the debtor and possible sources of information if this can be done in time. A petition that is manifestly unfounded or manifestly abusive is dismissed immediately without a hearing.
An insolvency petition is therefore not a substitute for a demand, claim action or enforcement and is not a tactical threat for a bilateral settlement. The petition must address the statutory opening requirements. The claim and inability to pay each require a traceable factual basis.
The provision also states that a hearing fixed for examination may not be postponed to permit the conclusion of instalment agreements. A creditor negotiating payment or deferral in parallel must therefore continue to monitor the insolvency procedure independently.
Section 71 requires assets sufficient to cover the initial costs of proceedings. The assets need not be immediately or effortlessly realisable. Known assets, receivables or potential avoidance claims should therefore not be assigned a value of zero without assessment.
If adequate assets are unlikely, section 71a permits proceedings to open if the applicant pays an advance ordered by the court. The court sets the amount and deadline by order. If the advance is not paid in time, the petition is dismissed for lack of sufficient assets.
Under section 71a(3), a timely advance may only be claimed as an estate claim. The legal evidence and the economic risk of an advance should therefore both be assessed before filing. The creditor document check helps organise claim, procedure and security records for individual review of the advance.
Section 70(4) provides that withdrawal or satisfaction of the applicant’s claim after filing is not taken into account in the decision on opening. Evidence of payment or a deferral agreement is not by itself sufficient to disprove inability to pay. The procedure concerns all creditors, not only the applicant.
Withdrawal also has a specific consequence. Under section 70(3), a withdrawn petition based on the same claim cannot be renewed before six months have passed. A withdrawal should not be declared without examining this procedural effect.
If proceedings cannot be opened immediately and the petition is not manifestly unfounded, section 73 provides for interim measures to protect the estate and continuation of the business. The court determines the measure after inquiries. Court orders and public notices should therefore be reconciled continuously with the creditor’s file.
No. Under section 70, the creditor must establish a credible claim and the debtor’s inability to pay. Nonpayment of one invoice does not automatically prove a general inability to pay.
Section 70(1) expressly includes an insolvency claim that is not yet due. Its legal basis, amount and allocation to the debtor must still be made credible. Whether the specific claim qualifies requires separate review.
Under section 70(4), satisfaction after filing is not taken into account in the opening decision. Payment or deferral alone is also insufficient to disprove inability to pay.
Yes. If assets sufficient for initial costs are unlikely, the court may order an advance under section 71a with a specified amount and deadline. Without timely payment, the petition is dismissed for lack of sufficient assets.
Review the claim basis, procedural position, security and next steps together.
Compile procedure data, the claim, payments and security in a structured file.
Review goods, invoices, retention of title and security separately after opening.
Tell us your role, the business concerned and the procedural status. We respond within one business day.
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