Default on a private loan due to insolvency

The final default of a private loan claim is to be assumed if the insolvency administrator has notified the insolvency court of the insufficiency of assets.

In order for losses from a private loan to be tax-deductible, the partial or complete default of the loan claim must be established. As a rule, the opening of insolvency proceedings against the debtor's assets is not sufficient for this. The loss of the loan is not certain until the insolvency proceedings have been concluded. However, the Federal Fiscal Court is convinced that the loss can exceptionally arise at an earlier point in time if repayment can no longer be objectively expected. This is the case, for example, if the insolvency administrator notifies the insolvency court of the insufficiency of assets after the insolvency proceedings have been opened.