Debt Relief & Personal Insolvency in Austria (2026): How It Works
In Austria, natural persons who cannot pay their debts may open a Schuldenregulierungsverfahren (debt regulation procedure), commonly known as Privatkonkurs (private bankruptcy), under Part 6 of the Austrian Insolvenzordnung (IO, §§ 181-216). The competent court for non-business debtors is the Bezirksgericht (district court, § 182 IO). The procedure first seeks a Zahlungsplan (payment plan) agreed with creditors; if that fails, an Abschoepfungsverfahren (income appropriation period) of typically 3 years follows. Successful completion leads to Restschuldbefreiung (discharge of remaining debts, § 213 IO). The official authority is the Austrian Federal Ministry of Justice (justiz.gv.at). The most recent major reform is the Insolvenzrechtsanderungsgesetz 2021 (IRÄG 2021, BGBl I Nr. 147/2021), in force from 17 July 2021.
What it is called
Personal insolvency for individuals in Austria is called Schuldenregulierungsverfahren (debt regulation procedure), formally defined in Part 6 of the Insolvenzordnung (IO), §§ 181-216. The informal colloquial term is Privatkonkurs (private bankruptcy). The procedure has three sub-phases: the main Schuldenregulierungsverfahren (§§ 181-192b IO); the Zahlungsplan (payment plan, §§ 193-198 IO); and, if the payment plan fails, the Abschoepfungsverfahren mit Restschuldbefreiung (income appropriation with debt discharge, §§ 199-216 IO). The authoritative text of the IO is published at the Austrian Legal Information System (Rechtsinformationssystem, RIS) at ris.bka.gv.at. The most recent reform, the Insolvenzrechtsanderungsgesetz 2021 (IRÄG 2021), came into force on 17 July 2021 and implemented EU Directive 2019/1023 on restructuring and insolvency.
Who can use it
Under § 181 IO, the Schuldenregulierungsverfahren applies to any natural person (natürliche Person), whether or not they are currently in business. There is no minimum or maximum debt amount required to apply. For non-business debtors (consumers, employees, pensioners), the competent court is the local Bezirksgericht (district court, § 182 IO). Business debtors are handled by a higher court depending on the case. The Abschoepfungsverfahren phase - through which most debtors ultimately achieve discharge - may be refused by the court (§ 201 IO) on the following grounds: the debtor was convicted of specific criminal offences under the Austrian Criminal Code that have not been expunged (§§ 156, 158, 162 or 292a StGB); the debtor willfully or grossly negligently violated disclosure or cooperation obligations during proceedings; the debtor failed to make reasonable efforts to find appropriate employment; an officer of a legal entity was involved in disclosure violations during insolvency; the debtor within three years before the proceedings recklessly dissipated assets or incurred disproportionate liabilities; the debtor made false statements to obtain insolvency relief; or an Abschoepfungsverfahren was already initiated in the preceding 20 years (§ 201 IO).
How the process works
The Schuldenregulierungsverfahren proceeds in three main stages. Stage 1 - Opening and asset realisation: The debtor submits an application to the competent Bezirksgericht to open insolvency proceedings. The court appoints an insolvency administrator (Insolvenzverwalter). The debtor's realisable assets (excluding exempt items such as basic household goods and tools of trade) are liquidated and proceeds are distributed to creditors. The debtor must fully disclose all assets and income. Stage 2 - Zahlungsplan (payment plan, §§ 193-198 IO): After the asset liquidation phase, the debtor proposes a Zahlungsplan to creditors. The debtor should file this request at the same time as the insolvency application, or at the latest during proceedings (§ 193 IO). Under § 194 IO, the plan must offer creditors a quota corresponding to the debtor's income situation over the following three years; the repayment period may not exceed seven years. If the debtor has no attachable income, no payment needs to be offered. Creditors vote on the plan at a court hearing. If the required majority approves, the court confirms the plan; the insolvency proceedings then close and the plan functions as an enforceable settlement agreement, discharging remaining debts on completion. Stage 3 - Abschoepfungsverfahren (§§ 199-216 IO): If the Zahlungsplan is rejected and the debtor meets the eligibility conditions under § 201 IO, the court opens the Abschoepfungsverfahren. A court-appointed Treuhander (trustee) receives the debtor's attachable income for the duration of the procedure and distributes it to creditors. The court decision opening this phase also terminates the insolvency proceedings (§ 200 IO). The trustee provides annual accounts to the court and a final report at the end (§ 203 IO).
How long it lasts and the outcome
If the Zahlungsplan is accepted by creditors: the debtor makes payments for up to 7 years as agreed in the plan (§ 194 IO). Once completed, remaining debts included in the plan are discharged. If the Abschoepfungsverfahren applies: the income assignment period is set out in § 199 IO. For debtors who filed a Zahlungsplan request together with the Abschoepfungsantrag - which is the standard approach - the period runs for 3 years. For debtors who applied for Abschoepfungsverfahren without a concurrent Zahlungsplan, the period is 5 years. The debtor must throughout this time (§ 210 IO): seek appropriate employment and not refuse reasonable work; disclose inheritances and gifts received; immediately report changes of address or employer to the court and trustee; and channel all payments exclusively through the trustee. After the income appropriation period ends, the court issues a decision on Restschuldbefreiung (§ 213 IO): the debtor is released from all remaining liabilities toward insolvency creditors that were not satisfied during the proceedings. This decision is publicly announced. Debts NOT discharged by Restschuldbefreiung (§ 215 IO): liabilities arising from intentional unlawful acts by the debtor; and claims that were missed (not registered in time) solely due to the debtor's own fault during the proceedings. The proceedings and the discharge decision are entered in the Austrian insolvency register (Insolvenzdatei / Ediktsdatei, available at edikte.justiz.gv.at). Entries are typically retained for 5 years after the close of proceedings.
Where to get official help
- Federal Ministry of Justice (Bundesministerium fur Justiz): justiz.gv.at - official ministry; general information on insolvency. - Austrian Legal Information System (RIS): ris.bka.gv.at - full authoritative text of the Insolvenzordnung and all Austrian legislation; free public access. - Austrian insolvency register (Insolvenzdatei / Ediktsdatei): edikte.justiz.gv.at - public register of all open Austrian insolvency proceedings and decisions. - State-certified debt counselling (Schuldnerberatung): Austria has a network of free, state-funded non-profit debt counselling centres, one in each of the nine provinces. They provide free advice on Privatkonkurs and can help prepare the application. A directory is available at the social welfare offices (Sozialamt) of each provincial government (Landesregierung) and through justiz.gv.at. - Arbeiterkammer (Chamber of Labour, ak.or.at): provides free consumer and debt guidance in each province. IMPORTANT: This guide is for general information only and does not constitute legal advice. Insolvency law changes; always verify current provisions at ris.bka.gv.at and consult a state-certified debt counsellor (Schuldnerberatung) or lawyer before taking any action.
FAQ
Do I need a lawyer to file for Privatkonkurs in Austria?
A lawyer is not legally required to file for Schuldenregulierungsverfahren. However, the application involves several mandatory documents and a court hearing. Most debtors find it helpful to use the free state-certified Schuldnerberatung (debt counselling) service, which is available in every Austrian province at no charge and can guide you through the entire process. Complex cases, particularly those involving business debts or real estate, benefit from legal advice. Contact your local Schuldnerberatung through your provincial social welfare office or through justiz.gv.at.
What happens to my home or car during proceedings?
The insolvency administrator is required to realise (sell) all non-exempt assets. Whether your home or car is sold depends on their value, any secured claims (such as a mortgage), and whether the equity is sufficient to yield a meaningful distribution to creditors. Austrian law protects certain basic necessities, but valuable property is generally not exempt. You should seek specific advice from a Schuldnerberatung or lawyer early in the process, before filing, so you understand the likely outcome for any significant assets. (§§ 1-13 IO on the insolvency estate; EO (Exekutionsordnung) on exempt items.)
Can my employer or creditors find out about my Privatkonkurs?
Yes. Austrian insolvency proceedings are public. All insolvency decisions, including the opening of Schuldenregulierungsverfahren and the grant of Restschuldbefreiung, are published in the official Insolvenzdatei (Ediktsdatei) at edikte.justiz.gv.at and are accessible to anyone. Creditors are notified directly by the court. Some employers, particularly in finance or regulated industries, may check insolvency registers. Entries remain in the register for approximately 5 years after the close of proceedings.
⚠️ Unverbindliche Schätzung, keine Steuerberatung. Lohnabrechnungen können in Sonderfällen abweichen. Im Zweifel Fachperson fragen.