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Business

Bankruptcy support group in Germany helps down-and-outs

For entrepreneurs who take big gambles with investments, bankruptcy can lurk behind each decision. One businessman in Germany, faced with such a reality, has decided to turn to others in the same situation.

An orange sign that says Closed due to bankruptcy in German

Closed due to bankruptcy - signs like these are common

You could call Attila von Unruh a serial entrepreneur. As the story of his life shows, he is comfortable starting new programs and new ventures from the ground up. However, Attila never imagined that his most successful enterprise would come about during the lowest point of his life – personal bankruptcy.

Born in Lima, Peru, Attila moved to Germany with his family when he was a young adult. Anxious to get his feet wet in business, Attila was in his early twenties when he launched an extension of an airline in Cologne. Soon after, he started a catering business and a chain of restaurants. By 1995, he created an event marketing agency and an event technology firm. But, it was a few years later when he really had a chance to test his creativity – the buyer of a company he sold mismanaged it and left him liable for the financial mess.

"Suddenly I was confronted with a huge amount of money that I had to pay and I couldn't," said Attila.

"After a long time of fighting and many attempts to clear the situation, I had to declare bankruptcy and that was very hard for me."

No safety net

Like the 900,000 people in Germany who are in insolvency and the 140,000 more who go bankrupt every year, Attila was confronted with the repercussions of the label. He was unable to rent an apartment or get a mobile phone contract. He lost his money for retirement and the ability to re-engage in business. Unlike Chapter 11 bankruptcy protection in the United States, Germany provides little safety net for those in debt.

A man with no money in his pockets

Insolvency Anonymous wants to help people get their finances under control before going bankrupt

"The problem in Germany is it is stigmatized for the people who fall into insolvency," said Attila. "It's connected with a lot of shame; it's connected with people cut out from society, being expelled from social contacts. That makes it very difficult for people to face it."

But then Attila did what he knows best: he came up with a business plan to help himself through the emotional turmoil. He created Insolvents Anonymous, a safe meeting place for people either going through bankruptcy or who are on the brink of it to come and share their stories.

"It helps to be able to talk with each other, just to talk," he said. "Also, to listen. Most people feel they are freaks, they are not normal and what they feel is not ok. When you hear from the others who have similar feelings of fear, resignation and anger, it gives you the feeling you are normal."

Many in need

As the financial crisis worsened, the idea spread and soon hundreds of people from all over Germany were asking for a similar service. Within three years, IA spread to 10 cities in Germany and even crossed the border into Austria. Over the past three years, he has worked with 5,000 entrepreneurs. A true businessman, the success made Attila realize he could expand the group to offer more than just emotional support.

Attila von Unruh

Attila von Unruh is something of a serial entrepeneur

"I see this enormous amount of knowledge in the groups and we have a lot of participants who have a lot of experience in solving crises," he said. "This is one goal – to pool this information and make it available to those who need it."

IA's aim now is to reach people before they become insolvent and give them the resources and advice they need to get their finances back under control. Counselors are also trained to deal with people in crisis situations and to handle emergencies like potential suicides. Attila isn't stopping there – he is also aiming to change Germany policy surrounding insolvency.

"In Germany, a person has to stay six years in process of insolvency and for three years after they are still blocked and don't have ability to start in business again,” he said. "We absolutely need to reduce this amount of time to what is done in England or France, which is about a year."

How far Attila can go depends on the kind of financial support he can attract for the initiative. He is currently funded through donations and is also now getting support from Ashoka, a non-profit that lends financial and consulting assistance to social entrepreneurs. A large chunk of IA's funding also comes from past participants, who find themselves back on solid financial ground.

"I had a guy just stop by the other day just to thank me for helping him avoid insolvency," Attila said. "He said the service changed his life."

Author: Jenny Hoff
Editor: Stuart Tiffen

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