30 August 2016

Acceptance of payment for delivered goods – What is at issue?

A debtor having financial difficulties is often no longer able to pay all outstanding bills. If he pays invoices for goods that have already been delivered and there are indications of financial difficulties, the creditor is well advised not to unconditionally accept payment but to first make inquiries about the debtor's actual financial situation. Doctrine and jurisprudence consider the payment of outstanding debts as fundamentally harmful to creditors if the debtor is not able to also settle all of his other financial obligations when due. If, subsequently, the debtor is declared bankrupt, if a seizure is executed, or if debt restructuring proceedings occur, a previously rendered payment can be challenged and the creditor can become obliged to return the received payment which will then form part of the enforcement proceedings.

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Categories: Restructuring & Insolvency

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