Lessee insolvency: what happens to the leased truck

Few sectors are hit by insolvency as often as transport and logistics. For 2025, Germany's Federal Statistical Office (Destatis) reports 133 company insolvencies per 10,000 companies in the transport and storage sector, the highest rate of any sector. In the first half of 2026 the sector was again at the top with 71.6 cases per 10,000 companies. For leasing companies and banks, that raises the question: what happens to the financed truck? The answer depends on whether you are the lessor or a lender holding the vehicle as security. This guide is based on German law.

Lease or loan: segregation or separate satisfaction

Lessors remain the owner of the vehicle, so it does not form part of the insolvency estate. Under section 47 of the German Insolvency Code (Insolvenzordnung, InsO), anyone who can show that an item does not belong to the estate is not an insolvency creditor and can claim its segregation (Aussonderung). The claim is governed by the law that applies outside insolvency, which for leasing means mainly sections 546 and 985 of the German Civil Code (Bürgerliches Gesetzbuch, BGB).

Banks holding a transfer of ownership as security (Sicherungsübereignung) are also owners, but only for security purposes. Under section 51 no. 1 InsO they are treated like pledgees: they are entitled to separate satisfaction (Absonderung) from the proceeds, but not to the vehicle itself.

The practical difference is large. The lessor ultimately gets its vehicle back. The bank gets money from the sale, which as a rule is carried out by the insolvency administrator.

After the insolvency filing: bar on termination and continued use

The rules change as soon as the application is filed. Under section 112 InsO, the lessor can no longer terminate after the application to open proceedings:

• because of payment arrears that arose before the application,
• because the lessee's financial situation has deteriorated.

Arrears arising after the application remain a ground for termination. So from the filing onwards, keep a close eye on every new instalment.

In addition, during the preliminary proceedings the insolvency court can order that items subject to segregation or separate satisfaction may not be realised or collected (section 21 (2) sentence 1 no. 5 InsO). The vehicle may then continue to be used in the business, to the extent that it is of considerable importance for continuing it. The estate must compensate the loss in value from that use through ongoing payments, to the extent that it impairs your security. Interest is due to you at the latest from three months after the order (section 169 sentence 2 InsO).

After proceedings open: the administrator's right to choose

If neither side has fully performed the lease, the insolvency administrator can choose (section 103 InsO):

• Performance: The administrator continues the contract and keeps using the vehicle. In that case the administrator must also perform it.
• Rejection: You can assert your claim for non-performance only as an insolvency creditor. You demand the vehicle back by way of segregation.

You can ask the administrator to decide. The administrator must then declare without delay whether they elect performance. If they fail to do so, they can no longer insist on performance.

Vehicles held as security: realisation by the administrator

If the administrator has possession of a vehicle transferred as security, they may sell it by private sale (section 166 (1) InsO). As the bank, you have these rights:

• Information or inspection (section 167 InsO): On request, the administrator must provide information about the vehicle's condition. Instead, the administrator may allow you to inspect it.
• Notice before the sale (section 168 InsO): The administrator must tell you how they intend to sell the vehicle. You then have one week to point to a better way of realising it. That can include taking over the vehicle yourself. An option also counts as better if it saves costs. If you point this out in time, the administrator must take up the option or put you in the position you would have been in if they had.
• Interest in case of delay (section 169 InsO): As long as the vehicle has not been sold, you are entitled to ongoing payment of the interest owed out of the estate from the report hearing (Berichtstermin) onwards.
• Compensation for use (section 172 InsO): If the administrator keeps using the vehicle, they must compensate the loss in value from the opening of proceedings through ongoing payments, to the extent that it impairs your security.

What the estate keeps from the proceeds

The administrator first deducts the costs of determination and realisation from the proceeds (sections 170 and 171 InsO):

• determination costs at a flat rate of 4 per cent of the proceeds,
• realisation costs at a flat rate of 5 per cent of the proceeds; if the actual costs were considerably lower or higher, the actual costs apply,
• plus an amount for VAT if the sale burdens the estate with VAT.

An example without VAT: on proceeds of 50,000 euros, the estate keeps 2,000 euros in determination costs and 2,500 euros in realisation costs. The bank receives 45,500 euros.

If the vehicle is already with you

If the vehicle is not with the administrator but already in your possession, your own right to realise it is unaffected (section 173 (1) InsO). At the administrator's request, however, the court can set you a deadline. After that, the administrator may sell the vehicle.

What you can do as a financier

1. Assert your rights early: Claim segregation or separate satisfaction in writing from the preliminary or final administrator, with a vehicle list, chassis numbers and contract documents.
2. Establish the condition: Request information or an inspection under section 167 InsO and document the result.
3. Use the one-week window: Once the notice under section 168 InsO arrives, you have one week for a better proposal. A reliable counter-offer, such as the documented highest bid from a blind auction, is a good basis for this.
4. Keep an eye on use: If the vehicle is still being used, claim ongoing payments for the loss in value.
5. Prepare the recovery: For segregated leased vehicles, plan collection, storage and remarketing before the vehicle is released.

The perspective of an insolvency administrator who has to sell an entire fleet is covered in Insolvency: selling commercial vehicles correctly.

Special case: insolvency of the leasing company

If it is not the lessee but the leasing company that is insolvent, a special rule applies. If it has transferred the vehicle as security to a third party who financed its purchase, the lease continues with effect for the estate (section 108 (1) sentence 2 InsO). The administrator then has no right to choose.

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Frequently asked questions about lessee insolvency

Does a leased truck form part of the insolvency estate?

No. The lessor remains owner and can claim segregation under section 47 InsO. The court can, however, order that the vehicle stays in use during the preliminary proceedings if it is of considerable importance for continuing the business.

Can the lessor terminate after the insolvency filing?

Not for arrears from before the filing and not because of the worsened financial situation (section 112 InsO). New arrears after the filing remain a ground for termination.

How much does the administrator keep from vehicles held as security?

A flat 4 per cent for determination costs and 5 per cent for realisation costs, plus VAT where applicable (section 171 InsO). If the actual realisation costs differ considerably, the actual costs apply.

Can the bank influence the administrator's sale?

Yes. Under section 168 InsO it has one week to point to a better way of realising the vehicle, including taking it over itself.

This guide provides an overview and is not a substitute for legal advice on an individual case.

More guides

Repossession and remarketing · Repossession: process and costs · Remarketing after termination · Insolvency: the administrator's view · Storing repossessed trucks