Collision handling is a comparatively time-consuming task in dynamic simulations and the computational efficiency of collision handling techniques can vary significantly dependent on the spatial configuration of the environment. These issues have to be addressed in interactive simulations such as games or surgical simulators, where a pre-defined response time should be guaranteed for each simulation step. We present a time-critical collision handling approach for deformable objects. The technique employs spatial subdivision for the detection of collisions and penetration depth information is computed to estimate penalty forces. Detection, penetration depth estimation, and response are divided into atomic tasks. In case of an interruption, the algorithm basically resumes in the next time step. If collisions are not completely handled in one simulation step, the algorithm ensures that persistent collisions are handled in a subsequent simulation step. If an exact response cannot be computed in a given time frame, the algorithm efficiently approximates penalty forces for colliding points. Experiments indicate that the proposed technique provides a physically plausible collision handling in the case of incomplete or inconsistent collision information. User-defined limits for the computation time can be guaranteed with an efficiency gain of up to factor three. Copyright © 2009 John Wiley & Sons, Ltd.