Asset disclosure statement (colloquial German: "oath of disclosure") - submitting an asset disclosure statement has consequences

Although the term "oath of disclosure" is outdated, it is still commonly used to describe the asset disclosure statement (previously: affidavit), the completeness and accuracy of the details provided in the list of assets. Basically, an asset disclosure statement is a declaration that is applicable in many situations in daily life. As part of the legal dunning and enforcement process, it serves to reveal the income and asset levels of a debtor (active assets). The term "oath of disclosure" goes back to the official language used in Germany until 1970.


"Oath of disclosure" in the legal dunning procedure

The asset disclosure statement is the final stage in a legal dunning procedure. Creditors choose this remedy if a debtor is unable to meet his obligations due to financial circumstances. This begins with an out-of-court dunning procedure. Creditors, usually suppliers or craftsmen, dun an unpaid invoice after the usual payment period of two weeks, first with a payment reminder, and then with one to three official dunning letters. At least with the last dunning letter, they state a final payment date; if this expires without effect, the debtor goes into default. In the legal dunning procedure, the way to an asset disclosure statement is via the default notice. A debtor who acknowledges the receivable has no objection to the default notice. If he is unable to pay the receivable, the default notice is followed by an enforcement order. A distraint order is available with the enforcement order. Creditors then appoint bailiffs to collect the receivable. If this is unsuccessful because the bailiff cannot distrain any usable income or assets, the next step will be an oath of disclosure (nowadays "asset disclosure statement").


Debtors must make an "oath of disclosure" at the creditor's request

The asset disclosure statement is not an official requirement. A debtor must only provide this if the creditor gives the bailiff the corresponding mandate. The disclosure of financial assets in the bailiff's office is an obligation a debtor cannot evade. If necessary, asset disclosure can be compelled with a warrant. Coercive detention for the acquisition of disclosure on financial assets may last up to six months. The debtor can end it at any time by submitting the required statement. Only in one case, the bailiff has the option to defer the asset disclosure request for up to half a year. The requirement is that the debtor credibly demonstrates that he can settle the receivable within six months. This is the regulation as per paragraph 806b and 900 of the Code of Civil Procedure. A typical example of this possibility is if employment is commenced after a long period of unemployment. In practice, a down payment and an instalment agreement may be sufficient to defer the "oath of disclosure" (asset disclosure) in some circumstances. As soon as a debtor fails to comply with the payment agreement, the bailiff will finally demand the submission of the asset disclosure statement.


"Oath of disclosure" - content and form of the statement

The bailiff in the district court responsible for the debtor's residence is responsible for the acceptance of the asset disclosure statement. Tax debtors make the "oath of disclosure" directly at the relevant tax office, and debtors of fees with the relevant administrative authority. The bailiff draws up a list of assets in line with the asset disclosure statement. The debtor is required to disclose all financial assets. These include cash, vehicles, real estate, savings plans and endowment policies. The debtor must also declare jewellery and other valuables, such as expensive sports equipment, electrical appliances and other items that are not exempt from distraint. Details of regular income are also included in the list. Subsequently, the debtor declares under oath that this list of his assets is complete and truthful. Giving false information in the asset disclosure constitutes the offence of a false statement given under oath.


Asset disclosure has consequences

Submitting an asset disclosure statement (previously "affidavit") on financial circumstances has serious consequences for the debtor. The asset disclosure statement is recorded in the District Court's list of debtors. In addition, credit rating agencies record the asset disclosure statement in their files. Persons who have provided an affirmation of this kind are considered not to be creditworthy. In addition, they are not entitled to incur debt again and may even be prosecuted for doing so. The debtor would enter into another payment agreement in the knowledge that he cannot comply with it. The jurisprudence therefore considers it to be fraudulent to incur more debt after submitting an "affidavit". Instalment plans with a retailer or mail-order business also count as indebtedness, in this sense.