What is Account Lending?
With the so-called “account lending”, the debtor agrees with a third party that the funds owed to the debtor should be transferred to the third party’s account. The debtor then either receives the access data to the account in order to dispose of “his money” or the third party pays him out in cash.
Debtors come up with this idea if the account has previously been seized, if one is threatened or the debtor is facing bankruptcy. Usually relatives, friends or good acquaintances are asked for this. As comprehensible as this approach may seem, this “friendship service” can prove to be momentous for everyone involved. This article shows the legal consequences that can affect both the debtor and the account borrower.
Can I borrow another account?
If private individuals or entrepreneurs get into financial difficulties, questions arise as to how one can legally protect one’s income from the enforcement access of the creditors. The idea of bank lending is not uncommon. As a rule, however, this approach is legally questionable for the following reasons:
Depending on the case, the procedure can mean a criminal offense for the debtor and lead to the refusal to discharge the remaining debt in insolvency proceedings. Criminal offenses that can be considered are the prevention of enforcement and insolvency offenses, which are regulated in Section 288 of the Criminal Code and Sections 283 ff. Of the Criminal Code.
- The prevention of enforcement in accordance with 228 protects the creditors in individual enforcement. In other words, in this case your financial situation is depressing, but bankruptcy proceedings are not (yet) in sight. Only individual creditors try to access your assets and you prevent this in a legally unlawful manner by selling or disposing of assets. Our article “Can you transfer your salary to another account? “.
- The insolvency offenses according to §§ 283 protect the creditors in the total enforcement / in the insolvency proceedings. In other words, in this case there is a reason for bankruptcy and the debtor or creditor could apply for the opening of the bankruptcy procedure. If a final conviction takes place on the basis of §§ 283, the desired discharge of residual debt can also be refused due to 290 para no. 1.
The agreement can also have consequences for the account borrower. If the debtor is convicted of, for example, Section 288 of the Criminal Code, the (with) provision of the account can be seen as an aid to this. This would also be a criminal offense according to Sections 288, 27. In addition, the account borrower must expect that his contract with the bank could be terminated. And if insolvency proceedings are opened against the debtor’s assets, the amounts owed to the debtor but which have flowed into the account of the borrower can be reclaimed by the borrower by way of insolvency contestation. More on this in the following section.
Bankruptcy trustee demands payment from account borrower, right?
The disservice performed for the sake of the requesting debtor as a result of the account loan can also prove to be disastrous for the acquaintance, friend or relative who lends the account. Depending on the case, the borrower may be asked to repay as a result of the debtor’s bankruptcy. The insolvency administrator will do this by way of insolvency avoidance (§§ 129ff). The amounts that were intended for the debtor but have been received in the account of the borrower will be claimed from the account borrower. This applies even if the amounts are no longer in the account because they have long since flowed back to the debtor. The Federal Court of Justice confirmed this in its judgment of 10.09.2015 – IX ZR 215/13. For the account borrower, this can mean that he himself can get into bankruptcy and need bankruptcy attorney on urgent basis.
However, the account borrower’s liability is not mandatory. If the account borrower was not aware of the payment difficulties, liability can be excluded.
More protection for retirees in the event of debts
Pensioners are not immune from seizures either. If bills are not paid or if the mountain of debt builds up, creditors can seize the pension. You are not, however, defenseless. Because every debtor has a right to an adequate subsistence level. Accordingly, a certain part of the pension cannot be attached to creditors. This is determined by the seizure exemption limits – also known as seizure exemptions.
The amount up to which no annuity can be garnished corresponds to the garnishment table applicable to the garnishment of earned income. This is because the pension is also treated as income.
In addition, some changes for pensioners came into force in 2021, such as a higher basic tax allowance, a newly introduced pension allowance or the right to housing benefit for pensioners.
Higher exemption limit from July 2021
There is good news to report for pensioners in debt: the non-attachable portion of their pension has been increased as of July 2021. The basic garnishment exemption for one person has increased from 1179.99 to 1259.99 dollars. The entire list of the applicable tax exemptions can be found in our garnishment table. The exemption limit of the garnishment table also applies to garnishment of pensions, since the pension is treated like earned income in the event of garnishment.
The seizure exemption limits are basically based on the number of dependents. The more people you are obliged to maintain as a pensioner, the more you can keep from your pension.
An example: You are receiving a pension and you live with your wife and your daughter who is in training. If a creditor would like to seize the pension against you, basic protection of $ 1259.99 has been in effect for you since July 2021. This means that up to this amount, dollars can be touched on your pension. However, since you are still obliged to support two people, your garnishment allowance increases to $ 1989.99. So you are usually protected against seizures up to this amount.
You can achieve seizure protection in accordance with the seizure table by converting your current account into a P-account. Then the protection will automatically take effect for you.
In addition, you do not need to fear that the entire pension above the seizure protection amount would be seized. It is only there that the possibility of annuity seizure begins.
Example: If we stick to our case outlined above, attachment can only be made from an amount of 1990.00 dollars. If your pension is therefore $ 2200.00, for example, the difference between $ 1989.99 and $ 2200.00 in the amount of $ 210.01 will not be seized, but only the amount of $ 85.31.
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