How we work and what we stand for

Kreditschutzverband von 1870

Kreditschutzverband von 1870 is a privileged creditor protection association in Austria that represents the interests of creditors in insolvency proceedings. We actively seek solutions for corporate and personal insolvencies in court. Our aim is to strengthen the financial power of creditors through dividend payments by negotiating viable compromises for all parties involved. In providing insolvency support across Austria, we do our part to keep the economy going: we help to put debts in order, financially rehabilitate private individuals, initiate restructuring proceedings, and are often able to preserve jobs. As a powerful community committed to the success of businesspeople, we represent the interests of more than 33,000 voluntary members and give creditors a strong voice.

The association and its purpose

Kreditschutzverband von 1870 was founded on 10 April 1870 by 40 Viennese merchants and industrialists, many from the textile trade. The idea was to protect businesspeople from financial losses by setting up an information exchange in a spirit of solidarity. That’s basically what Kreditschutzverband von 1870 does to this day. In submitting their claims to KSV1870, businesses authorise us to negotiate the best solutions in court on their behalf. Our employees provide advice in all creditor-related matters, have in-depth expert knowledge, and are lead negotiators in court. This ensures that creditors in Austria receive tangible recoveries through dividend payments.  

Our role in insolvency proceedings

In the event of an insolvency, the insolvent business or private individuals, the judge, the insolvency administrator, and creditor representatives such as KSV1870 all strive to find a solution. For many of those involved, we are the first point of contact for issues that require the professional attention of an expert. Experience has shown that insolvency proceedings involving only these few players are more successful than proceedings where many players are involved, a scenario that is likely to arise when the creditors decide to represent themselves. In Austria, for instance, reorganisation plan proposals are drawn up together with individual yet highly professional creditor representatives. The overriding goal is always to ensure the company’s going concern, provided its survival makes economic sense. As creditor representatives, we focus on the interests of the creditors and expect the insolvent business/individual to show a similar commitment to minimising the loss incurred by the creditors.

Nurturing a restructuring culture and giving companies a second chance

By international standards, Austria has a uniquely high corporate reorganisation rate, which can be attributed to the organised manner in which it affords protection to creditors. Roughly a third of the companies manage to reorganise successfully using the options available. As a result, companies that file for insolvency at an early stage and have a healthy core or a fundamentally functioning business model are able to continue to do business. They can carry on adding value, providing employment, and cultivating their existing customer and supplier relationships. Against this backdrop, legislators have introduced amendments to insolvency law in a bid to remove the stigma of insolvency. They were motivated by the fact that many entrepreneurs are extremely successful if given a second chance. We believe in giving entrepreneurs who have failed in good faith a second shot.

Economy cleanup

Over half of all the applications filed for initiation of insolvency proceedings in Austria are accepted and subjected to close scrutiny in order to establish the root causes. This diligence is necessary to ensure highest possible dividend payments to creditors. The orderly handling of insolvencies has the positive effect of clearing up the market. Businesses that undergo reorganisation continue to operate with rescheduled debts. Creditors are serviced, and liquidity flows back to them. Companies that fail to satisfy the requirements end up exiting the market. Insolvencies are thus important to ensure that Austria’s economy stays healthy. We are proud to play our part in keeping our economy strong and resilient.

Cooperation: Trust through expert knowledge

When Kreditschutzverband von 1870 takes on a creditor’s representation in insolvency proceedings, trust is essential. Most companies seek the support of an expert with decades of experience specialised in the practical and professional collection of insolvency claims. In retaining our services, they come to rely on our employees and expect to be kept informed and given clear recommendations on how to proceed. In practice, we take into account the interests of all creditors when determining the economic viability of a company’s reorganisation proposal. When assessing reorganisation plans, dividends, reconciliation moves, or write-offs, creditors rely on our expertise and generally give us free rein in negotiations with the debtors. The main aim is always to minimise losses.

Customer service, advice, and digitalization

Specific enquiries relating to individual insolvency cases can be addressed directly to the insolvency consultants in charge. With many years of experience under their belt, they are able to provide customers with reliable advice at the highest level. We also offer a large number of digitized services – creditors requiring support can use to these to obtain quick information about current developments. The up-to-date insolvency information provided by KSV1870 often allows companies to suspend deliveries or take out additional insurance for them. Customers can submit insolvency claims with a request for representation to Kreditschutzverband von 1870 around the clock using the insolvency ticker or via MyKSV, the KSV1870 member and customer portal.

Responsible credit approval

In line with the founding vision, the ConsumerCreditRecords (ConCR) database was launched in 1964 and established as a Kreditschutzverband von 1870 fixture. It encompasses over four million data records on credit-related consumer relationships and thus is the main tool for ensuring responsible and quick lending. Only banks, lending insurers, and leasing companies based in the European single market can register and request information. The purpose of our ConsumerCreditRecords is to protect the lending industry from financial losses and to ensure that private individuals are prevented from shopping around with different institutions to take out loans that they will be unable to service. The ConsumerCreditRecords provides a near-complete picture of personal loans in Austria. The warning list of Austrian banks is also a fixture in the association. It contains credit information on natural persons, in particular payment issues and any behaviour in breach of contract. Only banks have access to this database. Kreditschutzverband von 1870 is the data controller for both databases within the meaning of Article 4(7) GDPR and is therefore also responsible for responding to data subject enquiries.