Suspension of the obligation to file for insolvency
The obligation to file for insolvency due to over-indebtedness occurred in the period form 1 March to June 30, 2020 is suspended. During this period, insolvency proceedings shall also not be opened at the application of a creditor if the debtor is overindebted but not illiquid. But be careful, the obligation to file for insolvency in case of illiquidity remains unchanged. If the debtor is illiquid, he must file for insolvency without delay.
Period for filing for insolvency
The period for filling for insolvency was extended from 60 to 120 days in the event of a pandemic.
Loans and credits
In case bridge loans in the amount of a COVID-19 short-time work benefit are granted during the period in which the obligation of the debtor to file for insolvency proceedings due to over indebtedness was suspended and they are repaid immediately after receipt of the short-time work benefit, repayments to the lender are not subject to avoidance under Section 31 Austrian Insolvency Act if for the loan neither a pledge nor a comparable security has been provided from the borrower’s assets and the lender is not aware of the borrower’s illiquidity at the time the loan is granted.
Delay of consumer loan agreements
For consumer credit agreements concluded before 15 March 2020 lenders claims for repayment, interest or principal payments made between 1 April and 30 June 2020 shall be deferred for a period of three months from the due date if the consumer has lost income to the COVID 19 pandemic.
Residential lease agreements/termination
If the tenant of an apartment does not pay a rent due in the period form April 1, 2020 to June 30, 2020 or does not pay it in full because his economic capacity has been significantly impaired as a result of the COVID 19 pandemic the landlord may not terminate the lease solely because of three payment delays. The landlord may not demand the delayed payments in court until the end of 31 December 2020 or cover them from a deposit handled over the tenant. An eviction execution can be postponed without a security deposit it the apartment is used to satisfy the urgent housing needs of the obligated person and those living with him/her in a joint household unless the eviction is necessary to avoid serious personal or economic disadvantages of the landlord.
Short-time work benefit allows a temporary reduction in normal working hours (up to 10% on average over the entire period) and pay (up to 20% of gross pay, depending on income) due to economic difficulties. It can be granted for a maximum period of 3 months but can be extended for further 3 months.
Social security contribution
On request social security contributions for February, March and April 2020 may be deferred without interest for a limited period, if payment is not possible due to COVID-19 pandemic.
On request due to tax payments may be deferred without interest for a limited period if payment is not possible due to the COVID-19 pandemic.
Ulla Reisch is member of the European Insolvency Practitioners Association